Operating funds for the business

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In exchange for all of its stock, Aqua receives: assets (basis of $380,000 and fair market value of $1.8 million), trade accounts payable of $125,000, and loan due to a bank of $375,000. The proceeds from the bank loan were used by Shawn to provide operating funds for the business. Aqua Corporation assumes all of the liabilities transferred to it. A. b. c. Does Shawn recognize any gain on the incorporation? Explain. What basis does Shawn have in the Aqua stock? What basis does Aqua Corporation have in the assets it receives?

Reference no: EM13140839

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