Question: Problem 2: Same facts as in Problem 1, except that the factory is encumbered with a mortgage of $100. On the contribution, Abby contributed the

Problem 2: Same facts as in Problem 1, except that the factory is encumbered with a mortgage of $100. On the contribution, Abby contributed the factory to the corporation in exchange for 10 shares and assumption of the mortgage by AB Corp.

What is the amount of gain taxable to Abby?

What is the basis of the 10 shares of stock in the hands of Abby?

When does the holding period of the stock in the hands of Abby start?

What is the amount of gain taxable to AB Corp?

What is the basis of the factory in the hands of AB Corp?

When does the holding period of the factory in the hands of AB Corp start?

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