On March 1 of the current year, Maya, Arlo, Ximena, and Quinn form Plover Corporation with the following investments:

On March 1 of the current year, Maya, Arlo, Ximena, and Quinn form Plover Corporation with the following investments:

                                                       Property Transferred

                                                                                                                      Number of

Transferor      Asset                       Basis to Transferor        FMV               common

                                                                                                                    shares issued

Maya              Land                               $12,000               $30,000

                       Building                            38,000                70,000                  400

                       Mortgage and the

                       land & building                 60,000                60,000

Arlo                Equipment                       25,000                40,000                  300

Ximena           Van                                   15,000                10,000                    50

Quinn             Accounting Services                  0                10,000                  100

Maya purchased the land and building several years ago for $12,000 and $50,000, respectively. Maya has claimed straight-line depreciation on the building. Arlo also received a Plover Corporation note for $10,000 due in three years. The note bears interest at a rate acceptable to the IRS. Arlo purchased the equipment three years ago for $50,000. Ximena also receives $5,000 cash. Ximena purchased the van two years ago for $20,000.

a)  Does the transaction satisfy the requirements of Sec. 351?

b)  What are the amounts and character of the reorganized gains or losses to Maya, Arlo, Ximena, Quinn, and Plover Corporation?

c)  What is each shareholder’s basis for his or her Plover stock? When does the holding period for the stock begin?

d)  What is Plover Corporation’s basis for its property and services? When does its holding period begin for each property?

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