Shareholder basis in new stock

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Reference no: EM13137272

Greystoke, Inc. acquires the assets of Blackstone, Ltd. for its voting convertible preferred stock and assumes liabilities of $60,000. The assets have a basis of $250,000 and a value of $380,000. One of the shareholders in Blackstone trades her old shares with a basis of $3,000 for stock in Greystoke worth $3,200.

(a) What kind of reorganization took place?

(b) What is Greystoke's basis in the acquired assets?

(c) What is the shareholder's basis in her new stock?

(d) What would change, if, instead of assuming $60,000 of liabilities, this amount were paid in cash?

Reference no: EM13137272

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