Question
Kathy and Carl formed a corporation by Kathy contributing an asset with a FMV of $50,000 and an adjusted basis of $40,000 and Carl contributing
Kathy and Carl formed a corporation by Kathy contributing an asset with a FMV of $50,000 and an adjusted basis of $40,000 and Carl contributing inventory with a FMV of $40,000 and an adjusted basis of $50,000 for half of the stock in the corporation. In addition, Kathy received $10,000 of inventory from the corporation.
Does this exchange qualify for 351 treatment? Why?
Kathy and Carl formed a corporation by Kathy contributing an asset with a FMV of $50,000 and an adjusted basis of $40,000 and Carl contributing legal services worth $10,000 and inventory with a FMV of $40,000 and an adjusted basis of $50,000 for half of the stock in the corporation.
Does this exchange qualify for 351 treatment? Why?
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