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Screen Shot 2019-03-03 at 10.37.17 PM.png - Calculating...

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Unformatted text preview: Calculating Basis: Shareholder Stock and Corporate Property PLE Kesha and Ned form Brown Corporation. Kesha transfers land (basis of $30,000 and fair market value of $70,000); Ned invests cash ($60,000). They each receive 50 shares in Brown Corporation, worth $60,000, but Kesha also receives $10,000 in cash from Brown. The transfers of property, the realized and recognized gain on the transfers, and the basis of the stock in Brown Corporation to Kesha and Ned are as follows: A B C D E F Basis of Recognized Basis of Stock Property FMV of Stock Boot Realized Gain Gain (Lesser in Brown Transferred Received Received (B + C - A) of C or D) (A - C+ E) From Kesha: Land $30,000 $60,000 $10,000 $40,000 $10,000 $30,000 From Ned: Cash 60,000 60,000 -0- -0- -0- 60,000 Brown Corporation has a basis of $40,000 in the land (Kesha's basis of $30,000 plus her recognized gain of $10,000)....
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  • Fall '19
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  • share, Brown Corporation, Ned form Brown Corporation

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