In the current year, Mick, Pam, and Denny form Ash Corporation. Mick contributes land (a capital asset) having a $90,000 FMV purchased as an investment four years ago for $ 55,000 in exchange for 90 shares of Ash stock. Pam contributes machinery (Sec. 1231 property) purchased four years ago and used in her business in exchange for 90 shares of Ash stock. Immediately before the exchange, the machinery had a $ 130,000 adjusted basis and a $90,000 FMV. Denny contributes services worth $ 60,000 in exchange for 60 shares of Ash stock.

a. What is the amount of Mick's recognized gain or loss?

b. What is Mick's basis in his Ash shares? When does his holding period begin?

c. What is the amount of Pam's recognized gain or loss?

d. What is Pam's basis in her Ash shares? When does her holding period begin?

e. How much income, if any, does Denny recognize?

f. What is Denny's basis in his Ash shares? When does his holding period begin?

g. What is Ash's basis in the land and the machinery? When does its holding period begin? How does Ash treat the amount paid to Denny for his services?

h. How would your answers to Parts a through g change if Denny instead contributed $ 6, 000 in cash and services worth $54,000 for his 60 shares of Ash stock?