Bill and Bob agree to go into business together to sell hats. According to the agreement, Bill will contribute inventory valued at $$100,000$ in return for $80$ percent of the stock in the corporation. Bill$$s tax basis in the inventory is $$60,000.$ Bob will receive $20$ percent of the stock in return for providing accounting services to

the corporation $($these qualified as organizational expenditures$).$ The accounting services are valued at $$25,000.$

Please answer the questions below $-$ you must show your calculations and justify your answers $($backed with facts $-$ Code sections$)$

A$.$ What amount of gain or loss does Bill realize on the formation of the corporation? What amount, if any, does Bill recognize?

B$.$ What is Bill$$s tax basis in the stock received in return for his contribution of property to the corporation?

C$.$ What amount of income, gain, or loss does Bob realize on the formation of the corporation? What amount, if any, does Bob recognize?

D$.$ What is Bob$$s tax basis in the stock received in return for the contribution of services to the corporation?