Question
Noreen transfers to Spindle Corporation depreciable machinery originally costing $17,000 and now having a $12,000 adjusted basis. In exchange, Noreen receives all 350 shares of
Noreen transfers to Spindle Corporation depreciable machinery originally costing $17,000 and now having a $12,000 adjusted basis. In exchange, Noreen receives all 350 shares of Spindle stock having a $19,000 FMV and a three-year Spindle note having a $6,000 FMV.
Requirements
a. | What are the amount and character of Noreen’s recognized gain or loss? |
b. | What are Noreen’s bases in the Spindle stock and note? |
c. | What is Spindle’s basis in the machinery? |
Step by Step Solution
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Step: 1
a The total gain of Noreen shall be FMV of Spindle Stock 19000 FMV of Spindle Note 6...
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Step: 3
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Federal Taxation 2016 Comprehensive
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
29th Edition
134104374, 978-0134104379
