Stevie Walter has owned all 200 shares of Lenz Corporation's stock for the past six years. This year, Mark Stones contributes property with a $100,000
Stevie Walter has owned all 200 shares of Lenz Corporation's
stock for the past six years. This year, Mark Stones
contributes property with a $100,000 basis and a $160,000
FMV for 160 newly issued Lance shares. At the same time,
Stevie contributes $30,000 in cash for 30 newly issued Lenz
shares.
Answer the following questions assuming Code section 351
is satisfied at all relevant times:
What is each shareholder's recognized gain?
What is each shareholder's basis for his or her stock?
What is each shareholder's holding period for his or
her stock?
Does Lenz Corporation recognize gain when it issues
its stock?
What is Lenz Corporation's basis for the property
received from Mark?
What is Lenz Corporation's holding period for the
property received from Mark?
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