Bulbs and leaves LLC

Frannie started her new gardening business in February 2020. unfortunately, there was a pandemic that started a month later. The business still made a profit for the year, with the help of a bank loan. She also invested her own money in the business too. she currently files her business as a sole proprietorship. Frannie's friend Maddox has been looking for a good business to invest in. Maddox thinks Frannie's business will take off over the next two years if more was invested into equipment, employees, and a better location. Maddox is willing to put in $155,000 into her business. Frannie's net worth in the business is $38,180. Frannie can get a small business loan for $116,820. They decide to turn the business into Bulbs and Leaves LLC Inc. a C corporation. They will each contribute cash and or assets for 1 share per $1000.

Bulbs and leaves LLC Balance sheet (cash Basis) As of December 31sr 2020
Cash	2,200
property unsold	11,200
security deposit	3,000
start-up cost	155
Accumulated Amortization	-155
equipment	33,300
Van	8,500
accumulated Depreciation	(6,820)
TOTAL ASSETS	51,380
Sales tax payable	300
credit card payable	400
Bank Loan	12,500
Owners Contribution	17,000
owners equity	21,180
TOTAL LIABILITIES AND EQUITY	51,380

Bulbs and Leaves LLC Profit and Loss Statement (Cash Basis) January 1st- December 31st 2020
Gardening design/ consultuing	52,800
Product Income	43,300
TOTAL INCOME	96,100
Cost of Products sold	22,100
Van Expences	8,100
Depreciation	6,820
Amortization expense	155
Rent	12,650
Utilities	3,815
Telephone	1,800
Internet	2,400
office Supplies	3,167
Supplies	5,700
Meals (100% amount)	2,930
Website Monthly fee	2,400
Credit Card Processing fees	2,883
TOTAL Expenses	74,920
NET PROFIT	21,180

1. What will be Bulbs and Leaves LLC Inc's Basis in the assets that Frannie brings into the corporation from the LLC?

2. What will be Maddox's basis in his stock, if he buys in after Frannie and they will each own 50% of the Stock then?

3. Does it matter if they both buy corporate stock at the same time or at different times?

4. Will Frannie have a gain on her assets if she brings them into the corporation before Maddox joins the corporation?

5. What will Frannie's basis in her stock be?