In the current year Tom, Hank , and Kim form Corporation. Tom contributes land (a capital asset) having a 112,500 FMV (fair market value) in exchange for 165 shares of stock. He purchased the land three years ago for .140,000. Hank contributes machinery (Sec. 1231 property purchased four years ago) having a 75,000 adjusted basis and a 67500 FMV in exchange for 105 shares of stock. Kim contributes services worth 45,000 in exchange for 60 shares of stock.

a.What is the amount of Tom's recognized gain or loss?b.What is Tom'sn basis in his Water shares? When does his holding period begin?c.What is the amount of Hank's recognized gain or loss?d.What is Hank's basis in his Water shares? When does his holding period begin?e.How much income, if any, does Kim recognize?f.What is Kim's basis in her Water shares? When does her holding period begin?g.What is Water's basis in the land and the machinery? When does its holding period begin? How does Water treat the amount paid to Kim for her services?