Facts D (S Corporation):

Assume that the facts are the same as noted in Facts C except for the following: Joe intends to contribute Property A with fair market value (FMV) of $800 and basis of $300. At that time of contribution, Property A was encumbered with $300 debt financed from Bank A. Sunny intends to contribute cash of $800. For purposes of this question, Joe and Sunny are equal owners.

1)Provide Joes basis in MII upon contribution (i.e., Year 0) of Property A.

2) Provide Sunnys basis in MII upon contribution (i.e., Year 0) of cash.

3)Provide MIIs basis in Property A and cash immediately after contribution.