Ssam and Drew are equal members of the SD LLC, formed on June 1 of the current year. Sam contributed land that he inherited from his uncle Garza in 2009. Garza had purchased the land in1984 for $30,000. Tha land was worth $100,000 when Garza died. The fair market value of the land was $200,000 at the date it was contributed.

Drew has significant experience developing real estate. After SD is formed, he will prepare a plan for developing the property and secure zoning approvals for the LLC. Drew usually would bill a third party $50,000 for thses efforts. Drew will also contribute $150,000 of cash in exchange for his 50% interest in SD. The value of Drew's 50% interest is $200,000.

A.) How much gain or income does Sam recognize on his contribution of the land to SD? What is the character of any gain or income recognized?

B.) What basis does Sam take in his LLC interest?

C.) How much gain or income will Drew recognize on the formation of SD? What is the character of any gain or income recognized?

D.) What basis will Drew take in his LLC interest?