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Question 2 4 Jimmy, Kim, and Francesca form WML Corporation by contributing the following: Jimmy receives 5 0 % stock ( FMV $ 2 5
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Jimmy, Kim, and Francesca form WML Corporation by contributing the following:
Jimmy receives stock FMV $ Kim receives stock FMV $ and Francesca receives stock
FMV $ In addition, Kim receives $ cash from the corporation.
a What is the amount of recognized gain or income for Jimmy, Kim, and Francesca?
b What basis does Jimmy, Kim, and Francesca have in their WML stock?
c Assume that other facts above do not change, but the value of Francesca's accounting services is $ such that
she receives of the corporation's stock, how does your answer to part a change? ie what is the amount of
recognized gain or income for Jimmy, Kim, and Francesca?
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