Determine the tax consequences to each shareholder

Reference no: EM133472251

Question: Determine the tax consequences to each shareholder and the corporation and show supporting computations. Your answers should include:

Gain/loss realized by each shareholder
Gain/loss recognized by each shareholder (consider effect of Rev. Rul. 68-55)
Character of any gain/loss recognized by each shareholder
Shareholder's basis in the shares of stock received
Shareholder's basis in the bonds received
Corporation's basis in the assets received
The tax treatment of any other income, loss, deductions, etc. recognized by the corporation or shareholder.

In the current year, Xavier and Yolanda formed XY Corporation. Xavier contributed $500,000 cash and Yolanda contributing the following property:

	Basis	FMV
Land	$20,000	$175,000
Building	60,000	525,000

Both shareholders received 100 shares of common stock and the corporation assumed a $200,000 purchase money mortgage secured by the land and building.

Reference no: EM133472251

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