Problem 18-26 (LO. 1, 3) Seth, Pete, Cara, and Jen form Kingfisher Corporation with the following consideration: Consideration Transferred Number of Shares Issued Basis to Fair Market Transferor Value From Seth- Inventory $30,000 $96,000 305 From Pete- Equipment ($30,000 of depreciation taken by Pete in prior years) 45,000 99,000 303* From Cara- Proprietary process 15,000 90,000 From Jen- Cash 30,000 30,000 10 Seth receives $6,000 in cash in addition to the 30 shares ceives $9,000 in cash in addition to the 30 shares The value of each share of Kingfisher stock is $3,000 As to these transactions, provide the following information: a. Seth recognizes as ordinary gain V . Feedback b. Seth's basis in the Kingfisher Corporation stock is Feedback C. Kingfisher Corporation's basis in the inventory. Feedback Check My Work d. Pete recognizes a of Feedback Check My Work e. Pete's basis in the Kingfisher Corporation stock is Feedback Check My Work f. Kingfisher Corporation's basis in the equipment is $ Feedback Check My Work g. Cara's has Feedback Check My Work h. Cara has a basis of in the Kingfisher Corporation stock Feedback Check My Work i. Kingfisher Corporation has a basis of $ in the proprietary process. Feedback Check My Work j. Jen has on the transfer Feedback Check My Work k. Jen has a basis of $ in the Kingfisher Corporation stock Feedback Check My Work I. During discussions relating to the formation of Kingfisher, Seth mentions that he may be interested in either (1) just selling all of his inventory in the current year for its fair market value of $96,000 or (2) proceeding with his involvement in Kingfisher's formation as shown above but followed by a sale of his stock five years later for $90,000. What would be the tax cost of these alternative plans, stated in present value terms? Assume a discount rate of 6%. The present value factors at 6% are 1.000 for year 1 and 0.7473 for year 5. Further, assume Seth's marginal income tax rate is 35% and his capital gains rate is 15% If required, round your answers to the nearest dollar. The present value of Seth's tax cost associated with the current sale of inventory for $96,000 is The present value of Seth's tax cost associated with the current receipt of 30 Kingfisher shares and $6,000 cash and the subsequent sale of 30 Kingfisher shares for $90,000 in five years is