Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $250,000 in return for 50 percent of the corporations stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporations stock:

FMV Adjusted Tax Basis

Building $ 93,750 $ 25,000

Land $ 218,750 $100,000

Total $ 312,500 $ 125,000

To equalize the exchange, Wiley Corporation paid Hermione $62,500 in addition to her stock.

Required:

What amount of gain or loss does Ramona realize on the formation of the corporation? What amount, if any, does Ramona recognize?

What is Ramona's tax basis in the stock received in return for the contribution of property to the corporation?

What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize?

What is Hermione's tax basis in the stock received in return for the contribution of property to the corporation?

What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione?

Assume Hermione's adjusted tax basis in the land was $250,000... What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize?

Assume Hermione's adjusted tax basis in the land was $250,000... What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione?

Assume Hermione's adjusted tax basis in the land was $312,500... What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize?

Assume Hermione's adjusted tax basis in the land was $312,500. What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione?

Assume Hermione's adjusted tax basis in the land was $312,500... What election can Hermione and Wiley Corporation make to allow Wiley Corporation to take a carryover basis in the land?