Chip has an accrual$-$method, calendar$-$year sole proprietorship. On January $1,2019,$ he creates accrual$-$method, calendar$-$year corporation and transfers to corporation, in exchange for all of corporation$$s stock $(1$ class$),$ a single asset as follows:

Asset $($depreciable personality$)$:

Original Cost $$100,000$

Adjusted Basis $$30,000$

Value $$250,000$

Holding period $=7$ years

Determine the tax consequence to:

Chip

Corporation

$2.$ Assume the same facts as in Question $1,$ with the following changes:

Vic joined Chip in January $1,2019,$ capitalization of corporation, with Vic contributing $$200,000.$ Chip got half of the stock, and $$50,000$; Vic got the other half of the stock.

What is the value of a corporation immediately after the section $351$ event $($you need this to determine the value of the stock received by the shareholders in the section $351$ event$)?$

Determine the tax consequence to

Vic

Chip

Corporation

Assume the same facts as in Question $2,$ with the following changes:

Chip$$s asst is worth $$400,000,$ and is subject to a nonrecourse liability of $$200,000.$ Chip gets no cash.

What is the value of the corporation immediately after section $351$ event?

Determine the tax consequences to:

Chip

Corporation