Philip, Keira, and Lewis form Red Corporation. Philip contributes land (a capital asset) having a $5,000 adjusted basis and a $14,000 fair market value (FMV) to Red in exchange for Red fifteen-year notes having a $14,000 face value. Keira contributes equipment (Sec. 1231 property) having a $12,000 adjusted basis and a $26,000 FMV for 25 shares of Red stock. She previously claimed $5,500 of depreciation on the equipment. Lewis contributes $21,000 cash for 25 shares of Red stock. Read the requirements. Requirement a. What are the amount and character of Philip's, Keira's, and Lewis's recognized gains or losses select "No gain or loss" in the Character column.) Philip Keira Lewis Amount of Gain or Loss Character of Gain or Loss Requirement b. What basis do Philip, Keira, and Lewis take in the stock or notes they receive? Enter the basis amount, then select whether this amount is for notes or stock received. Philip Keira Basis Stock or Notes received Requirements a. What are the amount and character of Philip's, Keira's, and Lewis's recognized gains or losses? b. What basis do Philip, Keira, and Lewis take in the stock or notes they receive? c. What basis does Red take in the land and equipment? What happens to the $5,500 of depreciation recapture potential on the equipment? Print Done Lewis Requirement c. What basis does Red take in the land and equipment? What happens to the $5,500 of depreciation recapture potential on the equipment? Red Corporation's basis in the land is Red Corporation's basis in the equipment is Requirement c. What basis does Red take in the land and equipment? What happens to the $5,500 of depreciation recapture potential on the equipment? Red Corporation's basis in the land is Red Corporation's basis in the equipment is What happens to the $5,500 of depreciation recapture potential on the equipment? A. The $5,500 recapture potential is not important after the transfer because Keira does not recognize a gain on the asset transfer. B. The $5,500 recapture potential is inherited by Red because Keira does not recognize a gain on the asset transfer. C. The $5,500 recapture potential is a deferred gain to Keira because Red assumed the asset transfer. D. The $5,500 recapture potential is inherited by Red because Keira recognizes a gain on the asset transfer.