In March of Year 2, Manny contributed the following two properties, which he acquired in February of Year 1, to Albany Corporation in exchange for additional Albany stock: (1) land having a $49,000 FMV and a $71,000 basis and (2) another property having an $88,000 FMV and a $72,000 adjusted basis. Albany' employees use the land as a parking lot until Albany sells it in March of Year 3 for $44,000. One month after the sale, in April of Year 3, Albany adopts a plan of liquidation.

HOW WERE $5,000 AND $19,000 CALCULATED?

Requirement a. What is Albany' adjusted basis in the land immediately after its contribution in March of Year 2? Albany' adjusted basis in the land immediately after its contribution in March of Year 2 is $ 65,000 Requirement b. What is Albany' recognized gain or loss on the subsequent land sale? Albany recognizes a $ 21,000 loss on the subsequent sale of land. Requirement c. How would your answer to Part b change if the land were not used in Albany' trade or business? If the land were not used in Albany' trade of business, Albany recognizes a $ 5.000 loss on the subsequent sale of land. Requirement d. How would your answer to Parte change if Manny contributed the land and other property in March of Year 1 instead of March of Year 2? If Manny contributed the land and other property in Year 1 instead of Year 2, Albany recognizes a $ 21,000 loss on the subsequent sale of land. Requirement e. How would your answer to Parto change if the corporation sold the land (contributed in March of Year 2) for $84.000 instead of $44,000? If the land were not used in Albany' trade of business, and the corporation sold the land (contributed in March of Year 2) for $84,000 instead of $44,000 Albany recognizes a $ 10,000 gain on the subsequent sale of land. Requirement a. What is Albany' adjusted basis in the land immediately after its contribution in March of Year 2? Albany' adjusted basis in the land immediately after its contribution in March of Year 2 is $ 65,000 Requirement b. What is Albany' recognized gain or loss on the subsequent land sale? Albany recognizes a $ 21,000 loss on the subsequent sale of land. Requirement c. How would your answer to Part b change if the land were not used in Albany' trade or business? If the land were not used in Albany' trade of business, Albany recognizes a $ 5.000 loss on the subsequent sale of land. Requirement d. How would your answer to Parte change if Manny contributed the land and other property in March of Year 1 instead of March of Year 2? If Manny contributed the land and other property in Year 1 instead of Year 2, Albany recognizes a $ 21,000 loss on the subsequent sale of land. Requirement e. How would your answer to Parto change if the corporation sold the land (contributed in March of Year 2) for $84.000 instead of $44,000? If the land were not used in Albany' trade of business, and the corporation sold the land (contributed in March of Year 2) for $84,000 instead of $44,000 Albany recognizes a $ 10,000 gain on the subsequent sale of land