Barry, Sean and John formed Calm Corporation by transferring the following items to Calm Corp.

	Basis to transferor	Fair market value	Number of shares issued
Barry
Equipment	$20,000	$45,000	20
Sean
Cash	$65,000	$65,000	65
John
Services		$15,000	15

There was a loan outstanding of $23,500 on the equipment that Barry transferred to Calm Corporation. The corporation assumed the entire debt of $23,500. Assume that the fair market value of each share is $100.

a. What is the amount of Barrys recognized gain or loss?

b. What is Barrys basis in his Calm shares?

c. How much income, if any, must John recognize?

d. What is Johns basis in his Calm shares?

e. What is Calm Corporation's basis in the equipment?

f. How does Calm Corporation treat the amount paid to Johns for services?