Hunter and Warren form Tan Corporation. Hunter transfers equipment (basis of $210,000 and fair market value of $180,000) while Warren transfers land (basis of $15,000 and fair market value of $150,000) and $30,000 of cash. Each receives 50% of Tan’s stock.

Required: 1. Determine the amount of gain or loss Hunter recognizes on the formation of Tan Corporation. 2. Determine Hunter’s basis in his shares of Tan stock. Show your work. 3. Determine Tan’s basis in the equipment. Show your work.

Answer rating: 100% (QA)

1 Hunter has no loss or gain to be recognized on the formation of Tan Corporation E... View the full answer