Suppose in addition to the stock for the bonds Ernie received additional stock worth $500 for accrued interest on the bonds at the time of the exchange. How much if any income does Ernie report with respect to the stock received for the interest?

What is Ernie's holding period in the stock received for the interest?

Suppose instead Ernie was a common stock shareholder. His basis in the stock was $92,000. He exchanges the stock for $100,000 in Rcorp 3% bonds worth $98,000.  

1.  What if any gain or loss does Ernie recognize?

2. What is Ernie's basis in the bonds he receives for the stock? [answer1]

3. What is Ernie's holding period in the bonds?

4. If Rcorp changes its name to Capre how much gain or loss does Capre (formerly known as Rcorp) recognize? [answer1]

5. What is the reason for your answer to the previous question? [answer1]

6. After the transaction what is the basis of Capre's assets? [answer1]

7. How much gain or loss would RCorp's shareholders recognize if RCorp changed its place of incorporation from Nevada to Delaware? [answer1]

Answer rating: 100% (QA)

1 Ernie recognizes no gain or loss on the exchange of stock for ... View the full answer