Binding agreement between marielle and rob


Problem: Marielle forms Pharm, Inc. by transferring land (FMV $300,000; Basis of $100,000) to Pharm in exchange for 100% of its stock. Two weeks after the formation of Pharm, Marielle sells 30% of her Pharm stock to to Rob (an unrelated party) under a pre-arranged, binding agreement between Marielle and Rob entered into just prior to the formation of Pharm. Marielle: Marielle forms Pharm, Inc. by transferring land (FMV $300,000; Basis of $100,000) to Pharm in exchange for 100% of its stock. Two weeks after the formation of Pharm, Marielle sells 30% of her Pharm stock to to Rob (an unrelated party) under a pre-arranged, binding agreement between Marielle and Rob entered into just prior to the formation of Pharm. Marielle: A. Will have no gain or loss on the formation of Pharm B. Will have a $60,000 gain on the formation of Pharm C. Will have a $200,000 gain on the formation of Pharm

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Accounting Basics: Binding agreement between marielle and rob
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