In the currentyear, Joe, Kane, Lilly, and Myron transfer the following property to Griffin Corporation(an existingcorporation), which is owned equally by the four transferors.

Joe transfers land and a building with a $76,000 adjusted basis and a $128,000 FMV for additional Griffin stock having a $112,000 FMV and $16,000 of marketable securities having an adjusted basis of $14,000 in Griffin's hands. $34,000 of MACRSstraight-line depreciation on the building was claimed by Joe prior to the transfer.

Kane transfers equipment with a $140,000 adjusted basis and a $128,000 FMV for additional Griffin stock having a $112,000 FMV and a $16,000 20-year Griffin note. $34,000 of MACRS depreciation on the equipment was claimed by Kane prior to the transfer.

Lilly transfers inventory with a $74,000 adjusted basis and a $128,000 FMV for additional Griffin stock having a $112,000 FMV and $16,000 cash.

Myron transfers land with a $22,000 adjusted basis and a $128,000 FMV, subject to a $35,000 mortgage, which Griffin assumes, for additional Griffin stock having a $93,000 FMV.

Requirements:

a.

What amount and character of gain or loss does Joe recognize? What is Joe's basis in the Griffin stock and the marketablesecurities? What is Griffin's basis in the land andbuilding?

b.

What amount and character of gain or loss does Kane recognize? What is Kane's basis in the Griffin stock andnote? What is Griffin's basis in theequipment?

c.

What amount and character of gain or loss does Lilly recognize? What is Lilly's basis in the Griffin stock? What is Griffin's basis in theinventory?

d.

What amount and character of gain or loss does Myron recognize? What is Myron's basis in the Griffin stock? What is Griffin's basis in theland?

e.

What amount and character of gain or loss does Griffin recognize on the distribution of itsstock, note, and other property to itsshareholders?