Karen transfers to Bravo Corporation $3,000 cash and machinery having an $8,000 basis and a $33,000 FMV in exchange for 80 shares of Bravo stock. The machinery was used in Karen's business, originally cost Karen $41,000, and is subject to a $15,000 liability, which Bravo assumes. Ben exchanges $ 21,000 cash for the remaining 80 shares of Bravo stock.

a. What are the amount and character of Karen's recognized gain or loss?

b. What is Karen's basis in the Bravo Stock?

c. What is Bravo's basis in the machinery?

d. What are the amount and character of Ben's recognized gain or loss?

e What is Ben's basis in the Bravo stock?

f. When do Karen and Ben's holding periods for their stock begin?

g. How would your answers to Parts a through f change if Ben received $21,000 of Bravo stock for legal services (instead of cash)?