What will be the tax and nontax implications

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However, at this point, David is undecided about what he will do. Emily receives 200 shares of Transformation stock in exchange for the transfer of the following sole proprietorship assets to the new corporation as follows:

Adjusted Basis Fair Market Value

Accounts receivable $ 50,000 400,000 1,550,000

Building $2,000,000 $ -0-

Proprietary information-app 100,000 300,000 $400,000

Ethan will contribute $48 million of cash for 4,800 shares of Transformation stock.

Question 1: What will be the tax and nontax implications relating to the formation of Transformation, Inc.

Reference no: EM132480884

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