Solution-What amount of gain or loss does Hermione realize

What amount of gain or loss does Hermione realize

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Reference no: EM133005724

Question - Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $180,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted bases in return for 50 percent of the corporation's stock:

	FMV	Tax-Adjusted Basis
Building	$96,000	$24,000
Land	144,000	96,000
Total	$240,000	$120,000

To equalize the exchange, Wizard Corporation paid Hermione $60,000 in addition to her stock.

Required - What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize?

Reference no: EM133005724

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What amount of gain or loss does Hermione realize

Reference no: EM133005724

Reference no: EM133005724

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