Now assume Zena, Inc. purchased the assets of Delrey, Inc. for the same consideration as stated. Zena simultaneously contributed the assets acquired to Zena II, Inc.

On July 1, 2019 Zena, Inc. Purchased the assets ofDelrey, Inc. directly

fromDelrey's. Zena consummated the purchase using cash of $20,000,000 and property with an adjusted basis of $500,000 and a Fair Market value of

$3,000,000. At the time of the acquisition,Delreyhad the following assets:

Assets	Adjusted basis	FMV
AR	400,000	300,000
Marketable securities	300,000	800,000
Loan receivable	200,000	100,000
US GOV Securities	500,000	500,000
Inventory	1,000,000	2,000,000
Furniture/fixtures	0	1,100,000
Building	600,000	4,000,000
Covenant not to compete	0	1,200,000
Total	3,000,000	10,000,000

Zena II's cumulative tax basis in its assets is equal to:$