On January 10 of the current year, Pearl transfers to Kyle Corporation a machine purchased three years ago for $105,000. On the transfer date, the machine has a $56,000 adjusted basis and a $88,000 fair market value (FMV). Pearl receives all 80 shares of Kyle common stock, worth $80,000, and 8 shares of nonqualified preferred stock worth $8,000. Read the requirements. Requirement a. What are the amount and character of Pearl's recognized gain or loss? and recognizes a(n) Requirement b. What is Pearl's basis in the common and nonqualified preferred stock? When does her holding period begin? and her holding period for the stock is deemed to begin Pearl realizes a Pearl's basis in the common stock is when she This is treated as Determine the basis in the two-year note and when the holding period would begin. Pearl's basis in nonqualified preferred stock is and her holding period for the nonqualified preferred stock begins on Requirement c. What are the amount and character of Kyle's gain or loss? Kyle Corporation recognizes Requirement d. What is Kyle's basis in the machine? When does Kyle's holding period begin? Kyle's basis in the machine is and Kyle's holding period is deemed to begin when