ACCT 540 Corporate Formations Problem Mary and Todd form the MT Corporation, with a transfer of the following properties: Mary $500,000 cash Todd S500,000 FMV property $300,000 tax basis Both Mary and Todd receive a 50% interest in the corporate stock Complete the following Mary Todd Realized gain Recognized gain Basis of Stock MT basis in contributed asset VARIATION 1: In addition to Mary and Todd, Karla joins the corporation at its inception. Karla will provide services to the corporation in exchange for a 25% interest in the stock. That is, she receives 25% of the outstanding shares. Does anything change? Why or why not? CHECK THE BOOK AS A SOURCE VARIATION 2: return to original facts (no Karla). Todd's property is valued at $700,000 but is contributed subject to a 200,000 liability. Complete the following Mary Todd Realized gain Recognized gain Basis of stock MT basis in contributed asset