Carson transfers equipment to a corporation in exchange for 100% of the outstanding stock. The market value of the equipment is $20,000 and he has a basis of $30,000. Refer to the questions/suggestions in the notes and write a one paragraph memo to Carson advising him what steps to take concerning his stock basis and the corporate stock basis in the equipment. (4 points)

Comment 1: What does the word immediately mean in Section 362(e)(1)(B)(ii)?

Comment 2: Is the corporations basis still limited to market value if the corporation has no plans for immediate sale of the equipment? See Section 362(e)(2)?

Comment 3: Does Carson care what the corporate basis in the equipment is? Would he prefer a higher corporate basis in the equipment or a higher personal basis in his stock? Is it likely that he will sell the stock soon? As for the equipment, think about depreciation. See Section 362(e)(2)(C). What advice would you give?