Chapter 19, Question 40 of Taxation for Individuals and Business Entities is giving me trouble.  I would like to know how to work through this problem, not what the answers are.  Can someone help me to understand the process by providing an example that is similar with some explanation of the steps taken vs. the answers? 

40. (LO2) Sam and Devon agree to go into business together selling college-licensed

clothing. According to the agreement, Sam will contribute inventory valued at

$100,000 in return for 80 percent of the stock in the corporation. Sam’s tax basis

in the inventory is $60,000. Devon will receive 20 percent of the stock in return

for providing accounting services to the corporation (these qualified as organizational

expenditures). The accounting services are valued at $25,000.

a. What amount of income gain or loss does Sam realize on the formation of

the corporation? What amount, if any, does he recognize?

b. What is Sam’s tax basis in the stock he receives in return for his contribution

of property to the corporation?

c. What amount of income gain or loss does Devon realize on the formation of

the corporation? What amount, if any, does he recognize?

d. What is Devon’s tax basis in the stock he receives in return for his contribution

of services to the corporation?

Assume Devon received 25 percent of the stock in the corporation in return for

his services.

e. What amount of income gain or loss does Sam recognize on the formation

of the corporation?

f. What is Sam’s tax basis in the stock he receives in return for his contribution

of property to the corporation?

g. What amount of income gain or loss does Devon recognize on the formation

of the corporation?

h. What is Devon’s tax basis in the stock he receives in return for his contribution

of services to the corporation?