Mary and Todd form the MT Corporation, with a transfer of the following properties: Mary $2,300,000 cash
Question:
Mary and Todd form the MT Corporation, with a transfer of the following properties:
Mary $2,300,000 cash Todd $2,300,000
FMV property $1,600,000
Tax basis Mary will receive 50% and Todd 50% of the corporate stock.
Complete the following
Mary Tod
Realized gain ____0____ ____0____
Recognized gain ____0____ ____0_____
Basis of Stock ____ _____
MT basis in contributed asset __________ _________
VARIATION 1: Return to original facts (same basis). Todd’s property is valued at $3,300,000 but is contributed subject to a $700,000 liability. (This means that Todd still contributes equity of $2,600,000 so it is still a 50/50 split of ownership. Complete the following
Mary Todd
Realized gain ________ ________
Recognized gain ________ _________
Basis of stock _________ _________
MT basis in contributed asset __________ _________
VARIATION 2: Same as Variation 1 (same basis) except Todd’s property is valued at $4,400,000 and is contributed subject to a liability of $1,800,000. (Again Todd contributes $2,600,000 of equity)
Complete the following
Mary Todd
Realized gain ________ ________
Recognized gain ________ _________
Basis of stock _________ _________
MT basis in contributed asset __________ _________
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill