How much gain does Calvin recognize, if any, and what is his basis in the stock of Quail Corporation based on the facts?

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Amanda and Calvin form Quail Corporation. Amanda transfers equipment with an adjusted basis of $30,000, fair market value of $60,000, for 50% of the stock, worth $60,000. Calvin transfers fixture and furniture with an adjusted basis of $30,000, fair market value of $60,000, and equipment with an adjusted basis of $30,000, fair market value of $60,000, for the remaining 50% of the stock. Please note that the equipment Calvin contributed had a liability of $61,000 which the corporation assumes. Amanda and Calvin form Quail Corporation. Amanda transfers equipment with an adjusted basis of $30,000, fair market value of $60,000, for 50% of the stock, worth $60,000. Calvin transfers fixture and furniture with an adjusted basis of $30,000, fair market value of $60,000, and equipment with an adjusted basis of $30,000, fair market value of $60,000, for the remaining 50% of the stock. Please note that the equipment Calvin contributed had a liability of $61,000 which the corporation assumes.

Answer rating: 100% (QA)

When Calvin transfers the equipment with an adjusted basis of 30000 and a fair market value of 60000 ... View the full answer