Reference no: EM133223871
Question 1 - Allen transferred 3 assets to a newly formed corporation in exchange for 100 shares of voting common stock plus cash. The assets transferred were as follows:
Asset I real estate held for 2 years, FMV $44,000, adjusting basis of $80,000.
Asset II real estate held for 6 months, FMV $66,000, adjusting basis of $40,000.
Asset III depreciable property (§ 1245) FMV $110,000, adjusted basis of $50,000
Cash received $20,000
Stock received: 100 shares of voting common, FMV = $200,000
Required -
1. What is corporation's basis in asset I?
2. What is corporation's basis in asset II?
3. What is corporation's basis in asset III?
Question 2 - Allen transferred 3 assets to a newly formed corporation in exchange for 100 shares of voting common stock plus cash. The assets transferred were as follows:
Asset I real estate held for 2 years, FMV $44,000, adjusting basis of $80,000.
Asset II real estate held for 6 months, FMV $66,000, adjusting basis of $40,000.
Asset III depreciable property (§ 1245) FMV $110,000, adjusted basis of $50,000.
Cash received $20,000
Stock received: 100 shares of voting common, FMV = $200,000
Required - What is the total gain recognized by Allen on the exchange?
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