Arleta transfers property valued at $210,000 (basis  $190,000) to BCD Corporation in exchange for 70 percent of its stock. Georgia transfers property valued at $85,000 (basis  $75,000) and performs $5,000 in accounting services in exchange for the other 30 percent of BCD’s stock.

a. What are Arleta and Georgia’s gains/income or losses realized?

b. What are Arleta and Georgia’s gains/income or losses recognized?

c. What are their bases in BCD’s stock?

d. What is BCD’s basis in the property received?

AppendixLO1