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Compute the gain or loss recognized by the corporation

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Question - Please answer all four parts: A, B, C & D...and make sure to differentiate between the gain/loss realized and recognized in part a. I believe the recognized gain/loss is zero since I believe this transfer qualifies for § 351 treatment, but I would like confirmation of that thought. Thank you.

Transfers to Controlled Corporations: Fundamentals. During the year, A and B formed a new corporation. Each received 100 shares of stock for contributing the following assets:

Transferor A

Property Transferred: Cash

Transferor's Basis: $100,000

Fair Market Value: $100,000

Transferor B

Property Transferred: Land & Building

Transferor's Basis: $20,000

Fair Market Value: $70,000

Property Transferred: Equipment

Transferor's Basis: $40,000

Fair Market Value: $30,000

Required -

a. Compute the gain or loss realized and recognized by A and B.

b. Compute the basis of the stock received by A and B.

c. Compute the gain or loss recognized by the corporation.

d. Compute the bases of the assets received by the corporation.

Reference no: EM132653501

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