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Please show work...thank you! On March 1 of the current year, Alice, Bob, Carla, and Dick form Bear Corporation and transfer the following items: Property
Please show work...thank you!
On March 1 of the current year, Alice, Bob, Carla, and Dick form Bear Corporation and transfer the following items: Property Transferred Number of Basis to Transferor Transferor Common Asset FMV Shares Issued Alice $12,000 38,000 Land Building Mortgage on the land and building Equipment Van $30,000 70,000 400 60,000 25,000 15,000 -0- 60,000 40,000 10,000 10,000 Bob Carla Dick 300 50 100 Accounting services Alice purchased the land and building several years ago for $12,000 and S50,000, respec- tively. Alice has claimed straight-line depreciation on the building. Bob also receives a Bear note for $10,000 due in three years. The note bears interest at the prevailing market rate. Bob purchased the equipment three years ago for $50,000. Carla also receives $5,000 cash. Carla purchased the van two years ago for $20,000 a. Does the transaction satisfy the requirements of Sec. 351? b. What are the amount and character of the gains or losses recognized by Alice, Bob, Carla, Dick, and Bear? c. What is each shareholder's basis in his or her Bear stock? When does the holding period for the stock begin? d. What is Bear's basis in its property and services? When does the holding period for each property beginStep by Step Solution
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