Question
Mickey, Ray, and Debra decide to create UNA Corporation to manufacture and sell fireplaces. Mickey and Ray contribute the following assets to the corporation on
Mickey, Ray, and Debra decide to create UNA Corporation to manufacture and sell fireplaces. Mickey and Ray contribute the following assets to the corporation on January 1, 2015: Individual Property Adjusted Basis Fair Market Value Mickey Equipment $30,000 $50,000 Ray Land $25,000 $65,000 The property contributed by Mickey has a $40,000 liability attached to it that UNA assumes. Mickey had used this equipment in another business for the last 3 years. The land owned by Ray was held as investment for 8 months before he contributed it to UNA. Mickey and Ray receive 15% and 65%, respectively, of UNA's common stock. Debra contributed services to UNA during January 2015 valued at $20,000 in return for 20% of UNA's common stock. She received her stock on January 1, 2015. Compute the gain that Mickey must recognize as a result of this transaction and the basis in his stock. A1 lock copy cut paste A B C 1 Shareholder Gain Basis in Stock 2 Mickey
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