Reference no: EM132839684
Stevie Walter has owned all 200 shares of Lenz Corporation's stock for the past six years. This year, Mark Stones contributes property with a $100,000 basis and a $160,000 FMV for 160 newly issued Lance shares. At the same time, Stevie contributes $30,000 in cash for 30 newly issued Lenz shares.
Answer the following questions assuming Code section 351 is satisfied at all relevant times:
Problem 1: What is each shareholder's recognized gain?
Problem 2: What is each shareholder's basis for his or her stock?
Problem 3: What is each shareholder's holding period for his or her stock?
Problem 4: Does Lenz Corporation recognize gain when it issues its stock?
Problem 5: What is Lenz Corporation's basis for the property received from Mark?
Problem 6: What is Lenz Corporation's holding period for the property received from Mark?
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