A$,$ B$,$ C$,$ D and E$,$ all individuals, form X Corporation to engage in a manufacturing business. X issues $100$ shares of common stock. A

transfers $$25,000$ cash for $25$ shares; B transfers inventory with a value of $$10,000$ and a basis of $$5,000$ for $10$ shares; C transfers unimproved

land with a value of $$20,000$ and a basis of $$25,000$ for $20$ shares; D transfers equipment with a basis of $$5,000$ and a value of $$25,000($prior

depreciation taken was $$20,000)$ for $25$ shares; and E transfers a $$20,000($face amount and value$)$ installment note for $20$ shares. E received the

note in exchange for land with a $$2,000$ basis that he sold last year. The note is payable over a five$-$year period, beginning in two years, at

$$4,000$ per year plus market rate interest.

$($a$)$ What are the tax consequences $($gain or loss recognized, basis and holding period in the stock received$)$ to each of the

transferors? As to E$,$ see I.R$.$C$.453$B$($a$)$ ; Reg. $1\mathrm{.}4539($c$)(2)$; Prop. Reg. $1\mathrm{.}453$B$1($c$).$

$($b$)$ What are the tax consequences $($gain recognized, basis and holding period in each of the assets received$)$ to X Corporation?

$($c$)$ Assume all the same facts except that C transfers two parcels of unimproved land $($Parcel #$1$ and Parcel #$2),$ each with a value of

$$10,000.$ C$$s basis in Parcel #$1$ is $$15,000$ and C$$s basis in Parcel #$2$ is $$8,000.$ What result to C and X Corporation?

$($d$)$ There was $$5,000$ of gain inherent in the inventory transferred by B$.$ If X Corporation later sells the inventory for $$10,000,$ and

B sells his stock for $$10,000,$ how many times will that $$5,000$ of gain be taxed? Is there any justification for this result?