What basis will conan take in the ln stock he receives

Assignment Help Financial Accounting

Reference no: EM131263329

Conan and Andy decide to form a new corporation, LN Corp. Conan contributes property with a basis of $10,000 and a fair market value of $18,000 in exchange for 5 shares of LN stock and $13,000 in cash, which LN borrows from a bank to finance. Andy contributes property with a basis of $35,000 and a fair market value of $80,000 in exchange for 80 shares of LN stock.

a. How much taxable gain or loss will Conan recognize as a result of the transaction?

b. What basis will Conan take in the LN stock he receives?

Reference no: EM131263329

Questions Cloud

How this change in family structure has altered the culture : In the modern world, few Americans grow up in the traditional nuclear family. The high divorce rate has led to an increase of blended families in which one or both partners have children from previous relationships that will need to blend into the..

Prepare a list of the most frequently requested skills : How often do the ads mention communication, teamwork, and computer skills? - What tasks do the ads mention? Discuss your findings with your team members.

In what ways are itil and cobit similar : In what ways are ITIL and COBIT similar? How are they different? 8. Is it important for business managers to understand and be involved in IT governance? Why or why not?

Professional staff throughout the state : The company, however, has set the same prices for pharmaceuticals and services in all of its hospitals. It has also paid the same salaries for doctors, nurses, and other professional staff throughout the state.

What basis will conan take in the ln stock he receives : Conan and Andy decide to form a new corporation, LN Corp. Conan contributes property with a basis of $10,000 and a fair market value of $18,000 in exchange for 5 shares of LN stock and $13,000 in cash, which LN borrows from a bank to finance. How muc..

Production possibility frontier : Economists use economic models to study real world economic issues. The two basic economic models are Production Possibility Frontier (PPF) and the Circular Flow Diagram.

Determining the firm production function : Suppose that a firm's production function is given by Y=24 K N-N2, where K is the level of capital and N is the number of laborers the firm employs. For the given production function, the marginal products are MPN=24 K-2N and MPK = 24 N. The renta..

Discuss the given statements : Discuss the following statements. Are they myths or facts? - Because I'm in a technical field, I will work with numbers, not words.

Can you perform these activities year-round : What everyday changes, if any, might you make to increase the amount of energy expended in your day-to-day activities? What types and amounts of exercise would work best for you? Can you perform these activities year-round? If not, suggest alternativ..

User Account

All Pages