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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,

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's tax basis in Zena II is equal to? ________________________________

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