Bree transfers to Maynard Corporation $$7,000$ cash and machinery having a $$9,000$ basis and a $$27,000$ fair market value $($FMV$)$ in exchange for $55$ shares of Maynard stock. The machinery

was used in Bree's business, originally cost Bree $$36,000,$ and is subject to a $$19,000$ liability, which Maynard assumes. Mitch exchanges $$15,000$ cash for the remaining $55$ shares of

Maynard stock.

Read the requirements.

Requirements

Requirement a$.$ Wh

Start by identifying $E$

Bree's realized gain

Identify the amount

Bree's recognized $g$

a$.$ What are the amount and character of Bree's recognized gain or loss?

b$.$ What is Bree's basis in the Maynard stock?

c$.$ What is Maynard's basis in the machinery?

d$.$ What are the amount and character of Mitch's recognized gain or loss?

e$.$ What is Mitch's basis in the Maynard stock?

f$.$ When do Bree and Mitch's holding periods for their stock begin?

g$.$ How would your answers to Parts a through $f$ change if Mitch received

$$15,000$ of Maynard stock for legal services $($instead of cash$)?$