Mr. Trent transferred three apartment buildings to a new corporation in exchange for all its stock. The
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Question:
Mr. Trent transferred three apartment buildings to a new corporation in exchange for all its stock. The facts pertaining to the buildings were:
Building | Basis | Value | Mortgage | Recapture Potential |
1 | $10,000 | $100,000 | $60,000 | $0 |
2 | 15,000 | 80,000 | 0 | 5,000 |
3 | 20,000 | 30,000 | 0 | 4,000 |
What gains are realized and recognized on each building?
What is the character of the gains?
What is the corporation’s basis in each building?
What is Mr. Trent’s basis in his stock?
Related Book For
The Legal Environment of Business
ISBN: 978-0538473996
11th Edition
Authors: Roger E Meiners, Al H. Ringleb, Frances L. Edwards
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