Toby contributes $60,000 cash in exchange for stock in the corporation. Keith contributes worth $70,000 (basis of
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Toby contributes $60,000 cash in exchange for stock in the corporation. Keith contributes worth $70,000 (basis of $55,000) in exchange for $10,000 cash and $60,000 worth of stock in the corporation. After the transfer, Toby and Keith own 100% of the corporation.
- How much gain or loss do Toby, Keith, and the corporation recognize on the transfer?
- What is Toby’s basis in the stock?
- What is Keith’s basis in the stock?
- What is the corporation’s basis in the land?
- How, if at all, would your answers to part a. through d. change if Keith’s basis in the land were $66,000 (instead of $55,000)?
- How, if at all, would your answers to part a. through d. change if Keith’s basis in the land were $81,000 (instead of $55,000)?
Related Book For
South western Federal Taxation 2017 Essentials of Taxation Individuals and Business Entities
ISBN: 9780357109144
20th edition
Authors: William A. Raabe, David M. Maloney, James C. Young, Annette Nellen
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