Melanie and Sonny Form Bird Enterprises

Essay

Melanie and Sonny form Bird Enterprises.Sonny contributes cash of $100,000 and land worth $50,000 (adjusted basis of $30,000).Melanie contributes land and building worth $280,000 (adjusted basis of $200,000)and performs services worth $20,000 associated with the formation of the entity.Melanie receives a two-thirds ownership interest and Sonny receives a one-third ownership interest.Determine the tax consequences of the contributions to Melanie,Sonny,and Bird if the business is: