In the current$$ year, Matt$,$ Hank$,$ and Fiona form Sirens Corporation. Matt contributes land$($a capital$$ asset$)$ having a $ $62$ comma $500$ FMV$($fair market$$ value$)$ in exchange for $55$ shares of Sirens stock. He purchased the land three years ago for $ $100$ comma $000.$ Hank contributes machinery$($Sec$.1231$ property purchased four years$$ ago$)$ having a $ $130$ comma $000$ adjusted basis and a $ $37$ comma $500$ FMV in exchange for $45$ shares of Sirens stock. Fiona contributes services worth $ $25$ comma $000$ in exchange for $10$ shares of Sirens stock.

 

 Required:

a$.$ What is the amount of Matt$\text{'}$s recognized gain or$$ loss? 

 

Matt realizes a

and recognizes

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Required:

 

a$.$

What is the amount of Matt$\text{'}$s recognized gain or$$ loss?

b$.$

What is Matt$\text{'}$s basis in his Sirens $$shares$?$ When does his holding period$$ begin?

c$.$

What is the amount of Hank$\text{'}$s recognized gain or$$ loss?

d$.$

What is Hank$\text{'}$s basis in his Sirens $$shares$?$ When does his holding period$$ begin?

e$.$

How much$$ income, if$$ any, does Fiona $$recognize$?$

f$.$

What is Fiona$\text{'}$s basis in her Sirens $$shares$?$ When does her holding period$$ begin?

g$.$

What is Sirens$\text{'}$s basis in the land and the$$ machinery? When does its holding period$$ begin? How does Sirens treat the amount paid to Fiona for her$$ services?

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Answer rating: 100% (QA)

a To calculate Matts recognized gain on the contribution of land we need to find the difference between the fair market value FMV of the land and Matt... View the full answer