Spinone Corporation directs its sole shareholder, James, to exchange all of his common stock valued at $200,000 (basis of $50,000) for $100,000 of common stock, $70,000 of preferred stock, and $30,000 in cash. In addition, Spinone directs its sole bondholder, Karen, to exchange her $150,000 of bonds paying 6.0% for $160,000 of bonds paying 5.6%. How are these transactions treated for income tax purposes by James, Karen, and Spinone? Determine Jamess basis in his common and preferred stock. Prepare your solution using spreadsheet software such as Microsoft Excel.