Sheila transfers to Poseidon Corporation $9,000 cash and machinery having an $11,000 basis and a $26,000 FMV in exchange for 60 shares of Poseidon stock. The machinery was used in Sheila's business, originally cost Sheila $37,000, and is subject to a $21,000 liability, which Poseidon assumes. Tom exchanges $14,000 cash for the remaining 60 shares of Poseidon stock.

a. What are the amount and character of Sheila's recognized gain or loss? b. What is Sheila's basis in the Poseidon stock? c. What is Poseidon's basis in the machinery? d. What are the amount and character of Tom's recognized gain or loss? e. What is Tom's basis in the Poseidon stock? f. When do Sheila and Tom's holding periods for their stock begin? g. How would your answers to Parts a through f change if TomTom received $14,000 of Poseidon stock for legal services (instead of cash)?