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What are the tax consequences to dan and patricia

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Question - Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth $200,000, basis of $60,000) for 50% of the stock in Crane. Patricia transfers machinery (worth $150,000, adjusted basis of $30,000) and provides services worth $50,000 for 50% of the stock.

Required -

a. Will the transfers qualify under $351?

b. What are the tax consequences to Dan and Patricia?

c. What is Crane Corporation's basis in the land and the machinery?

Reference no: EM132476854

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