Identify the nature of any such gain or loss

Reference no: EM13945774

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

Consideration Transferred

	Basis to Transferor	Fair Market Value	Number of Shares Issued
From Seth-Inventory	$30,000	$96,000	30*
From Pete-Equipment ($30,000 of depreciation taken by Pete in prior years)	45,000	99,000	30**
From Cara-Proprietary process	15,000	90,000	30
From Jen-Cash	30,000	30,000	10

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 the 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 in the Kingfisher stock.

Reference no: EM13945774

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