On January 10 of the current year, Melinda transfers to Farafal Corporation a machine purchased three years ago for $106,000. On the transfer date, the machine has a $54,000 adjusted basis and a $118,000 FMV. Melinda receives all 125 shares of Farafal stock, worth $110,000, and a two-year Farafal note worth $8,000. Read the requirements. Requirement a. What are the amount and character of Melinda's recognized gain or loss? Melinda realizes a and recognizes a(n) This is treated as Requirement b. What is Melinda's basis in the stock and note? When does her holding period begin? Melinda's basis in the Farafal stock is and her holding period for the stock is deemed to begin when she Determine the basis in the two-year note and when the holding period would begin. Melinda's basis in the two-year note is and her holding period for the note begins on Requirement c. What are the amount and character of Farafal's gain or loss? Farafal Corporation recognizes