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musickatia [10]
3 years ago
15

Tracy transfers property with a value of $60,000 and adjusted basis of $50,000 to form Riley Corp. solely in exchange for all 10

0 shares of Riley stock valued $60,000. What is Riley Corp.'s basis in the property
Business
1 answer:
Olin [163]3 years ago
4 0

Answer:

$60,000

Explanation:

Tracy's basis on the transfer is $50,000 and the amount realized is $60,000.

So Tracy should have a realized gain of $10,000, but Section 351 states that no gain or loss must be recognized when one person transfers property in exchange for a corporation's stock if immediately after the transfer, the person controls the corporation. In this case, Tracy will own 100% of Riley Corp., so she doesn't have to recognize any gain.

Riley Corp.'s basis on the property will be $60,000 which is equal to the fair market value and the value realized by Tracy.

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The correct answers are,

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Ajax Inc. was formed on April 25 and elected a calendar year for tax purposes. Ajax paid $11,800 to the attorney who drew up the
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Answer: $5416.64

Explanation:

Based on the information given, $5000 will be deducted from its organizational cost of $17500, and we'll have $12500. Then, the capitalized cost over 6 months that's 180 days will be:

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