In the current year, Matt, Hank, and Lulu form H2O Corporation. Matt contributes land (a capital asset) having a $25,000 FMV in exchange for 120 shares of H2O stock. He purchased the land three years ago for $140,000. Hank contributes machinery (Sec. 1231 property purchased four years ago) having a $130,000 adjusted basis and a $15,000 FMV in exchange for 90 shares of H20 stock. Lulu contributes services worth $10,000 in exchange for 30 shares of H20 stock. Read the requirements Requirement a. What is the amount of Matt's recognized gain or loss? Matt realizes a and recognizes Requirement b. What is Matt's basis in his H20 shares? When does his holding period begin? and his holding period for the stock is deemed to begin Matt's basis in the H20 shares is $ when Matt originally Requirement c. What is the amount of Hank's recognized gain or loss? Hank realizes a $ and recognizes Requirement d. What is Hank's basis in his H20 shares? When does his holding period begin? and his holding period for the stock is deemed to begin Hank's basis in the H20 shares is $ when Hank originally Requirement e. How much income, if any, does Lulu recognize? Lulu realizes a and recognizes of $ Requirement f. What is Lulu's basis in her H20 shares? When does her holding period begin? Lulu's basis in the H20 shares is and her holding period begins the day Requirement g. What is H2O's basis in the land and the machinery? When does its holding period begin? How does H20 treat the amount paid to Lulu for her services? Let's begin by determining the basis in the land and when the holding period would begin. H2O's basis in the land is $ and H2O's holding period begins the day Determine the basis in the machinery and when the holding period would begin. H2O's basis in the machinery is $ and H20's holding period begins the day Determine how H2O will treat the amount paid to Lulu for her services. H2O's basis in the services would be $ and the holding period would start