What is the amount of gain

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Reference no: EM13122972

Rosa owns 30% of Pine Corporation's stock (basis of $50,000) and the other 70% was recently purchased by Arvid (basis of $620,000). Pine enters into a reorganization with Lodgepole Corporation, in which Rosa will receive a 5% interest (value of $300,000) in Lodgepole and Arvid will receive a 10% interest (value of $600,000) plus assets worth $100,000. Lodgepole's basis in these assets is $60,000. At the time of reorganization, Pine's value is $1 million, and Lodgepole's value is $6 million.

a. What are Rosa's and Arvid's basis in their new Lodgepole stock?

b. What is the amount of gain (loss) recognized by Rosa, Arvid, Pine, and Lodgepole on the organization?

Reference no: EM13122972

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