In March 2012, Mike contributed the following two properties, which he acquired in February 2011, to Kansas Corporation in exchange for additional Kansas stock (1) land having a $50,000 FMV and a $75,000 basis and (2) another property having an $85,000 FMV and a $70,000 adjusted basis Kansas ' empl...

a 65000 basis Kansas adjusted basis in the land immediately after the contribution is 65000 75000 10000 The 10000 reduction is computed as follows Tot ...

In March 2012, Mike contributed the following two properties, which he acquired in February 2011, to Kansas

Question:

In March 2012, Mike contributed the following two properties, which he acquired in February 2011, to Kansas in exchange for additional Kansas stock: (1) land having a $50,000 FMV and a $75,000 basis and (2) another property having an $85,000 FMV and a $70,000 adjusted basis.
Kansas' employees uses the land as a parking lot until Kansas sells it in March 2013 for $45,000. One month after the sale, in April 2013, Kansas adopts a plan of liquidation.
a. What is Kansas' adjusted basis in the land immediately after the March 2012 contribution?
b. What is Kansas' recognized gain or loss on the subsequent land sale?
c. How would your answer to Part b change if the land were not used in Kansas' trade or business?
d. How would you answer to Part c change if Mike contributed the land and other property in March 2011 instead of March 2012?
e. How would your answer to Part c change if the sold the land (contributed in March 2012) for $80,000 instead of $45,000?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...