Hosha exchanges all of her leaf stock for petal stock plus $5,000 cash. the exchange is pursuant to a tax-free reorganization. h

Question

3 years ago

10

Hosha exchanges all of her leaf stock for petal stock plus $5,000 cash. the exchange is pursuant to a tax-free reorganization. h

osha paid $25,000 for the leaf stock five years ago. the petal stock received by hosha has an $18,000 fair market value. if an amount is zero, enter "0".
a. what is hosha's realized and recognized gain/loss from the reorganization

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1 answer:

Grace [21] · Answer 1 · 2022-04-12T08:35:29+03:00

Grace [21]3 years ago

6 0

Her realized loss is 18K-5K=13K-25K=-12K
her recognized loss is -5K
her postponed loss is -12K-(5)=-7k
basis in petal stock= 18K-(7)=25K