What is Rafael recognized gain or loss

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Problem - Rafael transfers the following assets to Crane Corporation in exchange for all of its stock. (Assume that neither Rafael nor Crane plans to make any special tax elections at the time of incorporation.)

Assets

Rafael's Adjusted Basis

Fair Market Value

Inventory

$60,000

$100,000

Equipment

150,000

105,000

Shelving

80,000

65,000

Required -

a. What is Rafael's recognized gain or loss?

b. What is Rafael's basis in the stock?

c. What is Crane's basis in the inventory, equipment, and shelving?

d. If Rafael has no intentions of selling his Crane stock for at least 15 years, what action would you recommend that Rafael and Crane Corporation consider? How does this change the previous answers?

Reference no: EM132661817

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