Reference no: EM132669815

On June 1, 2019, Rob, Tom and Liam formed Sun Corporation. Rob contributed $10,000 cash in return for 10 shares, Tom contributed services in return for 10 shares, and

• Liam Contributed property and equipment with a basis of $20,000 and a fair market value of $80,000 in return for 80 shares.
• On July 1, 2020, Tom contributed equipment with a basis of $10,000 and a fair market value of $20,000 in return for an additional 10 shares in the corporation.

Questions:

Problem a) What are the tax consequences to Tom as a result of the June 1, 2019 contribution

Problem b) What are the tax consequences to Liam as a result of the June 1, 2019 contribution?

Problem c) What are the tax consequences to Tom as a result of the July 1, 2020 contribution?

Problem d) What is Sun Corporation's basis in the equipment contributed by Tom on July 1, 2020?

Problem e) Would your answer to part c) change, if Liam also contributed $1,000 cash on July 1, 2020? Why or why not?