Question: Dylan, Devon, and Ricken form Lemon Corporation in the current year. Dylan contributes $30,000 cash in exchange for 30 shares of Lemon. Devon contributes land

Dylan, Devon, and Ricken form Lemon Corporation in the current year. Dylan contributes $30,000 cash in exchange for 30 shares of Lemon. Devon contributes land with a market value of $50,000 (basis of $15,000) in exchange for 40 shares and $10,000 cash. Ricken provides services to Lemon valued at $30,000 in exchange for 30 shares.

a. Determine the realized gain or loss on the exchange for each shareholder.

b. Determine the recognized gain or loss (or income) on the exchange for each shareholder.

c. Determine the basis of each shareholder's stock.

d. Determine Lemon's basis in the land.

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