What is each shareholder realized gain or loss

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Reference no: EM133371197

Question: This year, John, Meg, and Karen form Frost Corporation by making the following contributions

Shareholder	Asset	Basis	FMV
John	Land (held as an investment by him)	$25,000	$30,000
Meg	Machinery	$50,000	$30,000
Karen	Inventory	$15,000	$30,000

Each shareholder receives 20 shares of stock in the corporation and each shareholder received a $10,000 note from the corporation.

1.)What is each shareholder's realized gain or loss?

2.)What is each shareholder's recognized gain or loss?

3.) What is each shareholder's basis in their stock? When does their holding period begin?

4.)Create Frost's tax balance sheet.

5.)Create Frost's FMV balance sheet

6.)If each shareholder sold his/her stock tomorrow, how much gain or loss would each recognize? How does this gain/loss relate to parts a and b?

Reference no: EM133371197

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