Question: Townsend the sole shareholder of Pruett Corporation has a 480 000

Townsend, the sole shareholder of Pruett Corporation, has a $480,000 basis in his stock. He exchanges his Pruett stock for $600,000 of Rogers voting common stock plus land with a fair market value of $100,000 and basis of $25,000 that is transferred by Rogers to Pruett. This exchange qualifies under ยง 368.
a. What is Townsend's recognized gain/loss from the reorganization?
b. What is the gain/loss recognized by Pruett Corporation and Rogers Corporation on the reorganization?
c. What is Townsend's basis in the Rogers stock and the land received?

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  • CreatedSeptember 09, 2015
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