Accounting

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

Solution:

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