Reference no: EM131762256

Seth, Pete, Cara and Jen form Kingfisher Corporation with the following considerations:

From Seth - Inventory Basis to Transferor $30,000 / Fair Market Value $96,000 /Number of Shares Issued 30 (Seth receives $6000 in cash in addition to 30 shares.

From Pete - Equipment ($30,000 of depreciation taken by Pete in prior years)/ Basis $45,000 /FMV $99.000/ Number of Shares Issued 30 (Pete receives $9,000 in cash in addition to 30 shares)

From Cara - Propietary process Basis to Transferor $15,000/ FMV $90,000 /Number of Shares Issued 30

From Jen - Cash Basis $30,000 / FMV $30,000 /Number of Shares Issued 30

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

A. Seth's recognized gain or loss. Identify the nature of any such gain or loss.

B. Seth's basis in the Kingfisher Corporation stock.

C. Kingfisher Corporation's basis in inventory

D. Pete's recognized gain or loss. Identify the nature of any such gain or loss.

E. Pete's basis in the Kingfisher Corporation stock.

F. Kingfisher Corporation's basis in the equipment.

G. Cara's recognized gain or loss.

H. Cara's basis in the Kingfisher Corporation stock.

I. Kingfisher Corporation"s basis in the proprietary process.

J. Jen's recognized gain or loss.

K. Jen's basis the Kingfisher Corporation's stock.