Question 11
In March of Year 2, Mark contributed the following two properties, which he acquired in February of Year 1 to Orleans Corporation in exchange for additional Orleans stock: (1) land having a $55,000 FMV and a 571,000 basis and (2) another property having an $86,000 FMV and a $73,000 adjusted basis. Orleans' employees use the land as a parking lot until Orleans sells it in March of Year 3 for $54,000. One month after the sale, in April of Year 3, Orleans adopts a plan of liquidation. (Assume that the properties were contributed to Orleans in a Sec. 351 transaction. Assume that the second property contributed by Mark was not land.) Read the requirements (Enter all amounts, even losses, as a positive number.) . Requirement a. What is Orleans' adjusted basis in the land immediately after its contribution in March of Year 2? Orleans' adjusted basis in the land immediately after its contribution in March of Year 2 is Requirement b. What is Orleans' recognized gain or loss on the subsequent land sale? Orleans recognizes a on the subsequent sale of land. Requirement c. How would your answer to Part b change if the land were not used in Orleans' trade or business? If the land were not used in Orleans' trade of business, Orleans recognizes a on the subsequent sale of land. Requirement d. How would your answer to Partc change if Mark contributed the land and other property in March of Year 1 instead of March of Year 2? If Mark contributed the land and other property in Year 1 instead of Year 2. Orleans recognizes a on the subsequent sale of land. Requirement e. How would your answer to Partc change if the corporation sold the land (contributed in March of Year 2) for $75,000 instead of $54,000? If the land were not used in Orleans' trade of business, and the corporation sold the land (contributed in March of Year 2) for $75,000 instead of $54.000 Orleans recognizes a on the subsequent sale of land. In March of Year 2, Mark contributed the following two properties, which he acquired in February of Year 1 to Orleans Corporation in exchange for additional Orleans stock: (1) land having a $55,000 FMV and a 571,000 basis and (2) another property having an $86,000 FMV and a $73,000 adjusted basis. Orleans' employees use the land as a parking lot until Orleans sells it in March of Year 3 for $54,000. One month after the sale, in April of Year 3, Orleans adopts a plan of liquidation. (Assume that the properties were contributed to Orleans in a Sec. 351 transaction. Assume that the second property contributed by Mark was not land.) Read the requirements (Enter all amounts, even losses, as a positive number.) . Requirement a. What is Orleans' adjusted basis in the land immediately after its contribution in March of Year 2? Orleans' adjusted basis in the land immediately after its contribution in March of Year 2 is Requirement b. What is Orleans' recognized gain or loss on the subsequent land sale? Orleans recognizes a on the subsequent sale of land. Requirement c. How would your answer to Part b change if the land were not used in Orleans' trade or business? If the land were not used in Orleans' trade of business, Orleans recognizes a on the subsequent sale of land. Requirement d. How would your answer to Partc change if Mark contributed the land and other property in March of Year 1 instead of March of Year 2? If Mark contributed the land and other property in Year 1 instead of Year 2. Orleans recognizes a on the subsequent sale of land. Requirement e. How would your answer to Partc change if the corporation sold the land (contributed in March of Year 2) for $75,000 instead of $54,000? If the land were not used in Orleans' trade of business, and the corporation sold the land (contributed in March of Year 2) for $75,000 instead of $54.000 Orleans recognizes a on the subsequent sale of land
