What amount ofgain or loss is recognized by sam

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1. Sam owns 100% of M Corporation's single class of stock. Sam transfers land and abuilding having a $30,000 and $100,000 adjusted basis, respectively, to M Corporation inexchange for additional M Corporation common stock worth $200,000 and IBM stockworth $20,000.

The IBM stock had a $5,000 basis on M Corporation's books. Petertransfers $50,000 in cash for 15% of the M Corporation common stock.

What amount ofgain or loss is recognized by Sam and M Corporation on the exchange?

Sam has come to you for advice so provide him with professional memo on the isssue, based on the IRC, treasury regulations, ruling and court cases if applicable.

Reference no: EM13756190

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