Ron and Hermione formed Wizard Corporation on January $2.$ Ron contributed cash of $$200,000$ in return for $50$ percent of the

corporation's stock. Hermione contributed a building and land with the following fair market values and tax bases in return for $50$

percent of the corporation's stock:

To equalize the exchange, Wizard Corporation paid Hermione $$50,000$ in addition to her stock.

Required:

a$.$ What amount of gain or loss does Ron recognize on the formation of the corporation?

b$.$ What is Ron's tax basis in the stock received in return for the contribution of property to the corporation?

c$.$ What amount of gain or loss does Hermione recognize on the formation of the corporation?

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

e$.$ What tax basis does Wizard Corporation take in the land and building received from Hermione?

f$.$ Assume Hermione's tax basis in the land was $$200,000.$

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

g$.$ Assume Hermione's tax basis in the land was $$200,000.$

What tax basis does Wizard Corporation take in the land and building received from Hermione?Ron and Hermione formed Wizard Corporation on January $2.$ Ron contributed cash of $$200,000$ in return for $50$ percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and tax bases in return for $50$ percent of the corporation's stock:

FMV Adjusted Tax Basis

Building $ $75,000$ $ $20,000$

Land $175,00080,000$

Total $ $250,000$ $ $100,000$

To equalize the exchange, Wizard Corporation paid Hermione $$50,000$ in addition to her stock.

Required:

What amount of gain or loss does Ron recognize on the formation of the corporation?

What is Ron'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 recognize on the formation of the corporation?

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

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

Assume Hermione's tax basis in the land was $$200,000.$

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 tax basis in the land was $$200,000.$

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