Section 351 Problem Please give the tax affects to both the shareholder and corporation, including any gains/losses and the basis of both the shareholders in their stock and the corporation in the assets.

Total of 5 shareholders All assets and liabilities were given during the incorporation:

Shareholder 1 gave $100,000 in cash for 20% ownership/shares.

Shareholder 2 gave a book binding equipment FMV $110,000, basis 30,000 and received $10,000 in cash plus 20% ownership/shares.

Shareholder 3 gave a building FMV $350,000, basis $100,000, and also the company took the building with a mortgage note of $250,000, for 20% ownership/shares.

Shareholder 4 gave paper inventory FMV $60,000, basis $55,000, plus a delivery truck FMV 40,000, basis $50,000 and received 20% ownership/shares

Shareholder 5 gave a printing press FMV $50,000, basis $30,000, plus copyrights FMV $60,000, basis $30,000 for 20% ownership/shares plus $10,000 in cash.