Compute ms tucks realized and recognized gain on exchange

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Mr. Boyd and Ms. Tuck decide to form a new corporation named BT Inc. Mr. Boyd transfers $10,000 cash and business inventory ($20,000 FMV; adjusted tax basis $3,200), and Ms. Tuck transfers business equipment (FMV $60,000; adjusted tax basis $41,500) to BT. In exchange for their cash and property, BT issues 1,200 shares of com­ mon stock to its two shareholders.

Question a. How many shares should Mr. Boyd and Ms. Tuck each receive?

Question b. Compute Mr. Boyd's realized and recognized gain on his exchange of property for stock, and determine his tax basis in his BT common shares.

Question c. Compute Ms. Tuck's realized and recognized gain on her exchange of property for stock, and determine her tax basis in her BT common shares.

Question d. Determine BT Inc.'s book and tax basis in the inventory transferred by Mr. Boyd and the equipment transferred by Ms. Tuck.

Reference no: EM132488562

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