Tom and Gail form Owl Corporation with the following consideration:
|
Consideration Transferred |
|
|
Basis to
Transferor |
Fair Market
Value |
Number of
Shares Issued |
| From Tom- |
|
|
|
|
|
|
|
|
Cash |
$50,000 |
|
$50,000 |
|
|
|
|
|
Installment note |
240,000 |
|
350,000 |
|
40 |
|
|
| From Gail- |
|
|
|
|
|
|
|
|
Inventory |
60,000 |
|
50,000 |
|
|
|
|
|
Equipment |
125,000 |
|
250,000 |
|
|
|
|
|
Patentable invention |
15,000 |
|
300,000 |
|
60 |
|
|
The installment note has a face amount of $350,000 and was acquired last year from the sale of land held for investment purposes (adjusted basis of $240,000). Regarding these transactions, provide the following information:
Note: If an amount is zero, enter "0".
a. Tom's recognized gain or loss is $.
b. Tom's basis in the Owl Corporation stock is $.
c. Owl Corporation's basis in the installment note is $.
d. Gail's recognized gain or loss is $.
e. Gail's basis in the Owl Corporation stock is $.
f. Owl Corporation's basis in the inventory is $ and equipment is $. Its basis in the patentable invention is $.
g. Would your answers to the preceding questions change if Tom received common stock and Gail received preferred stock?
SelectYesNoCorrect 1 of Item 7, because there Selectis ais noCorrect 2 of Item 7 requirement that the transferors receive the same type of stock.
h. Would your answers change if Gail was a partnership instead of an individual?
SelectYesNoCorrect 1 of Item 8, because there Selectis ais noCorrect 2 of Item 8 requirement that the transferors be individuals.