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Paul, Janie, and Kyla, incorporate their perspective businesses and form Blue Corporation. On April 1 of the current year, Paul exchanges his property (the basis of 50,000 and value of 150,000) for 150 shares in Blue Corp. On May 15, Janie exchanges her property (the basis of 70,000 and value of 500,000) for 500 shares in Blue. On June 10 Kyla transfers her property (the recognized basis of 90,000 and value of 350,000) for 350 shares in Blue.
A. If the 3 exchanges are part of a prearranged plan, what gain will each of the parties recognize on the exchanges?
B. Assume Paul and Janie exchanged property for stock 4 years ago while Kyla transfers her property for 350 shares in the current year. Kyla's transfer in not part of a prearranged plan with Paul and Janie to incorporate their business. What Gain recognize on the transfer?
C. Returning to the original facts, if the property that Kyla contributes has a basis of 490,000 (instead of 90,000), how might the parties otherwise structure the transaction?