On January 10 of the current year, Mary transfers to Green Corporation a machine purchased three years

Question:

On January 10 of the current year, Mary transfers to Green a machine purchased three years ago for $100,000. On the transfer date, the machine has a $60,000 adjusted basis and a $110,000 FMV. Mary receives all 100 shares of Green stock, worth $100,000, and a two-year Green note worth $10,000.
a. What are the amount and character of Mary's recognized gain or loss?
b. What is Mary's basis in the stock and note? When does her holding period begin?
c. What are the amount and character of Green's gain or loss?
d. What is Green's basis in the machine? When does Green's holding period begin?
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...