George and Brad together form the Odd Couple Corporation ("Odd") on Jan. 1, 20x1. George

transfers equipment (basis of $575,000 and fair market value of $600,000) to Odd in exchange for

50% of Odd's stock and $100,000 of cash from the corporation. Brad transfers cash of $110,000,

investment land (basis of $598,000 and fair market value of $338,000) and agrees to provide

ordinary and necessary cleaning services to the corporation in exchange for 50% of Odd's stock.

The services provided by George are worth $52,000. Assume that Odd began business immediately

after it was incorporated, and that Brad performed all of the required services between Jan. 2 and

March 31.

F. What basis does Odd have in the equipment (contributed by George)?

G. What basis does Odd have in the land (contributed by Brad)?

H. What gain, loss, income or deduction does Odd recognize from these events? [Hint:

See Section 83(h).]

I. How would you answer to Part H change (if at all) if the corporation still incorporated

on Jan. 1 but did not begin business until April 1? If any of the corporation's

deductions would change, calculate the new deduction under these facts.

J. Now assume that on February 1, 20x1, Brad sells all of his Odd stock to Murray.

Assume he has performed all the necessary cleaning services by this time and that

Brad's services were the only ones Odd needed in January. Under what

circumstances would this sale change your answer to Part A? Explain.