Question
Betty joined Jim in forming DBJ Corp. Betty contributed appreciated land for 90 percent of the stock in DBJ. Jim received 10 percent of the
Betty joined Jim in forming DBJ Corp. Betty contributed appreciated land for 90 percent of the stock in DBJ. Jim received 10 percent of the DBJ stock valued at $23,500. Determine Jim's tax consequences in each of the following alternative scenarios.
b-1. Jim contributed the rights to a patent he owned to DBJ in exchange for the DBJ stock. The patent was worth $23,500 and Jim's basis in the patent was $13,915. How much gain does Jim recognize on the exchange?
b-2. What is Jim's basis in the DBJ stock?
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Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
27th edition
978-1337272094, 1337272094, 978-1337514071, 1337514071, 978-1337899451
