LO.2, 4 Sam, Carl, Lucy, and Sylvia form Pine Corporation with the following consideration:

Consideration Transferred Basis to Transferor Fair Market Value Number of Shares Issued From Sam—

Inventory $30,000 $96,000 30*

From Carl—

Equipment ($30,000 of depreciation taken by Carl in previous years) 45,000 99,000 30**

From Lucy—

Secret process 15,000 90,000 30 From Sylvia—

Cash 30,000 30,000 10

*Sam receives $6,000 cash in addition to the 30 shares.

**Carl receives $9,000 cash in addition to the 30 shares.

Assume the value of each share of Pine Corporation stock is $3,000. As to these transactions, provide the following information:

a. Sam’s recognized gain or loss. Identify the treatment given to any such gain or loss.

b. Sam’s basis in the Pine stock.

c. Pine Corporation’s basis in the inventory.

d. Carl’s recognized gain or loss and its classification.

e. Carl’s basis in the Pine stock.

f. Pine Corporation’s basis in the equipment.

g. Lucy’s recognized gain or loss.

h. Lucy’s basis in the Pine stock.

i. Pine Corporation’s basis in the secret process.

j. Sylvia’s recognized gain or loss.

k. Sylvia’s basis in the Pine stock.