Refer to the facts in the preceding problem. Assume that Mrs. L, who is Mr. ZJ’s business colleague, transfers $200,000 cash to ZJL Corporation in exchange for 500 shares of ZJL stock. Mr. ZJ and Mrs. L’s transfers occur on the same day, and after the exchange ZJL has 1,500 shares of outstanding stock (1,000 owned by Mr. ZJ and 500 owned by Mrs. L).
a. Compute Mr. ZJ’s recognized gain on the exchange of assets for stock.
b. Compute Mr. ZJ and Mrs. L’s tax basis in their ZJL stock.
c. Compute ZJL’s tax basis in the assets transferred from Mr. ZJ.