Seth, Pete, Cara, and Jen form Kingfisher Corporation with the following consideration: Consideration Transferred Basis to Transferor Fair Market Value Number of Shares Issued From Seth Inventory $30,000 $96,000 30* From Pete Equipment ($30,000 of depreciation taken by Pete in prior years) 45,000 99,000 30** From Cara Proprietary process 15,000 90,000 30 From Jen Cash 30,000 30,000 10 *Seth receives $6,000 in cash in addition to the 30 shares. **Pete receives $9,000 in cash in addition to the 30 shares. The value of each share of Kingfisher stock is $3,000. If there is no gain or loss, enter $0 for the amount. As to these transactions, provide the following information for parts (a) - (l). a. Seth's recognized gain or loss. Identify the nature of any such gain or loss. Seth recognizes $fill in the blank 33383c023041fdc_1 6,000 as ordinary income . Feedback Section 351 provides that gain or loss is not recognized upon the transfer of property to a corporation when certain conditions are met. This provision reflects the principle that gain should not be recognized when a taxpayer's investment has not substantively changed. Questions have arisen concerning what constitutes property for purposes of 351. In general, the definition of property is comprehensive. b. Seth's basis in the Kingfisher Corporation stock. $fill in the blank e24c6f032f8cf89_1 30,000 Feedback Correct c. Kingfisher Corporation's basis in the inventory. $fill in the blank 54035ffd3f9c07b_1 36,000 Feedback Correct d. Pete's recognized gain or loss. Identify the nature of any such gain or loss. Pete recognizes a ordinary income of $fill in the blank 1e6974fc600bfda_2 9,000 . Feedback Correct e. Pete's basis in the Kingfisher Corporation stock. $fill in the blank c7eff2fcd06ffc3_1 45,000 Feedback Correct f. Kingfisher Corporation's basis in the equipment. $fill in the blank dc4d71fbf015ffb_1 54,000 Feedback Correct g. Cara's recognized gain or loss. Cara's has no gain or loss of $fill in the blank 2c9eb40ef066ffe_2 351 . Feedback Partially correct h. Cara's basis in the Kingfisher Corporation stock. $fill in the blank 0fbddfffefd9fb5_1 15,000 Feedback Correct i. Kingfisher Corporation's basis in the proprietary process. $fill in the blank 2c342702803e01a_1 15,000 Feedback Correct j. Jen's recognized gain or loss. Jen has no gain or loss of $fill in the blank 36f0bdfb7023038_2 0 on the transfer. Feedback Correct k. Jen's basis in the Kingfisher stock. $fill in the blank 1e387ffe5ff0fcd_1 30,000 Feedback Correct l. 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 (alternative 1) for $96,000 is $fill in the blank fc93cb045fd4fcb_1 The present value of Seth's tax cost associated with the current receipt of 30 Kingfisher shares and $6,000 cash (alternative 2) and the subsequent sale of 30 Kingfisher shares for $90,000 in five years is $fill in the blank fc93cb045fd4fcb_2 .