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Determine Marie and Ethan current income

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Problem - Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $80,000 in exchange for 400 shares of stock. Ethan contributes an installment note receivable (basis $25,000; fair market value $30,000), land (basis $50,000; fair market value $170,000), and inventory (basis $100,000; fair market value $120,000) in exchange for 1,600 shares.

Required -

1. Determine Marie and Ethan's current income, gain, or loss.

2. Calculate the basis that each takes in the Roundtree stock.

Reference no: EM132630972

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