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26. (150 Points) Saul and Inna form Sparkle Corporation with the following contributions: Saul
receives 67 shares and Inna receives 33 shares. The equipment's original cost was $60,000. After
taking $44,000 of depreciation, the basis is $16,000. a. Including the prepaid services provided
by Inna, what is the value of the corporation? b. What is Saul's Realized and Recognized Gain? i.
Realized Gain: ii. Recognized Gain: c. What is Saul's basis in the stock? d. What is Sparkle
Corporation's basis in the Furniture? e. What is Inna's Recognized Gain? f. What is Inna's basis
in the stock? g. What is Sparkle Corporation's basis in the Equipment? h. If Sparkle sells the
equipment for $20,000 shortly after Inna's contribution, what is the amount and character of the
gain? i. Amount of the gain: ii. Character of the gain:

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  • 1. 26. (150 Points) Saul and Inna form Sparkle Corporation with the following contributions: Saul receives 67 shares and Inna receives 33 shares. The equipment's original cost was $60,000. After taking $44,000 of depreciation, the basis is $16,000. a. Including the prepaid services provided by Inna, what is the value of the corporation? b. What is Saul's Realized and Recognized Gain? i. Realized Gain: ii. Recognized Gain: c. What is Saul's basis in the stock? d. What is Sparkle Corporation's basis in the Furniture? e. What is Inna's Recognized Gain? f. What is Inna's basis in the stock? g. What is Sparkle Corporation's basis in the Equipment? h. If Sparkle sells the equipment for $20,000 shortly after Inna's contribution, what is the amount and character of the gain? i. Amount of the gain: ii. Character of the gain: