Kelly owns all the stock in Duncan Corp. Her Duncan stock has a basis of ($ 120,000)
Question:
Kelly owns all the stock in Duncan Corp. Her Duncan stock has a basis of \(\$ 120,000\) and a fair market value of \(\$ 150,000\). Duncan Corp. is merged into Munro Corp. Pursuant to the reorganization, Kelly receives Munro preferred stock worth \(\$ 50,000\) and Munro common stock worth \(\$ 100,000\) in exchange for her Duncan Corp. stock.
a. What is the amount and character of Kelly's realized and recognized gain?
b. What is Kelly's tax basis for her Munro Corp. preferred stock and common stock?
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Step by Step Answer:
a To determine Kellys realized gain we subtract the basis of her Duncan Corp stock from the fair market value of the consideration received in the mer...View the full answer
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Related Book For 
CCH Federal Taxation 2019 Comprehensive Topics
ISBN: 9780808049081
2019 Edition
Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback
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