Question
Please answer all four parts: A, B, C & D...and make sure to differentiate between the gain/loss realized and recognized in part a. I believe
Please answer all four parts: A, B, C & D...and make sure to differentiate between the gain/loss realized and recognized in part a. I believe the recognized gain/loss is zero since I believe this transfer qualifies for 351 treatment, but I would like confirmation of that thought. Thank you.
Transfers to Controlled Corporations: Fundamentals. During the year, A and B formed a new corporation. Each received 100 shares of stock for contributing the following assets:
Transferor A
Property Transferred: Cash
Transferor's Basis: $100,000
Fair Market Value: $100,000
Transferor B
Property Transferred: Land & Building
Transferor's Basis: $20,000
Fair Market Value: $70,000
Property Transferred: Equipment
Transferor's Basis: $40,000
Fair Market Value: $30,000
a.Compute the gain or loss realized and recognized by A and B.
b.Compute the basis of the stock received by A and B.
c.Compute the gain or loss recognized by the corporation.
d.Compute the bases of the assets received by the corporation.
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