1.

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2

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Adam transfers cash of $300,000 and land worth $200,000 to Camel Corporation for 100% of the stock in Camel. In the first year of operation, Camel has net taxable income of $70,000. If Camel distributes $50,000 to Adam: e Adam has taxable income of $50.000 Camel Corporation has a tax deduction of $50,000. Adam has no taxable income from the distributio Camel Corporation reduces its basis in tho andl to $150.000 Next