Mr. Trent transferred three apartment buildings to a new corporation in exchange for all its stock.

The facts pertaining to the buildings were:

a. What gains are realized and recognized on each building? What is the character of the gains?

b. What is the corporation's basis in each building?

c. What is Mr. Trent’s basis in his stock?

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Building Basis Value 2 3 $10,000 $100.000 15,000 80,000 20,000 30,000 Recapture Mortgage Potential $60,000 0 0 $0 5,000 4,000