Mary and Todd form the MT Corporation, with a transfer of the following properties:

Mary$500,000 cash

Todd$500,000 FMV property

$300,000 tax basis

Both Mary and Todd receive a 50% interest in the corporate stock.

Complete the following

MaryTodd

Realized gain________________

Recognized gain_________________

Basis of Stock__________________

MT basis in contributed asset___________________

VARIATION 1:In addition to Mary and Todd, Karla joins the corporation at its inception.Karla will provide services to the corporation in exchange for a 25% interest in the stock.That is, she receives 25% of the outstanding shares.Does anything change?Why or why not? CHECK THE BOOK AS A SOURCE

VARIATION 2:return to original facts (no Karla).Todd's property is valued at $700,000 but is contributed subject to a $200,000 liability.

Complete the following

MaryTodd

Realized gain________________

Recognized gain_________________

Basis of stock__________________

MT basis in contributed asset___________________