Myron, Al, and Janda make the following transfers from their sole proprietorships to a newly formed business, each receiving a 1/3 ownership interest.

In addition, the business borrows $60,000 from a local bank for working capital. The loan is a nonrecourse debt. Determine the gain or loss the owners must recognize from the transfers and their basis in the ownership interest received under the assumptions set forth here. Also, determine any gain or loss recognized by the business entity from the transfers and its basis in the property received:
a. The business is organized as a partnership.
b. The business is organized as a corporation.
c. The business is organized as an Scorporation.

Transcribed Image Text:

Fair Market Value of Basis of Owner TransfersTansfedProyfcrredbM Busines Liabilities Assumed by Business Asset Services ransferred Myron Building Al $60,000 90,000 30,000 $110,000 80,000 60,000 30,000 S30,000 Equipment Janda Vehicles 10,000 Legal services