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Unformatted text preview: (2) Original cost $125,000, depreciated using MACRS (39-year property). (3) Original cost $110,000, depreciated using MACRS (7-year property). (4) Original cost $75,000, depreciated using MACRS (5-year property). (5) Original cost $50,000, depreciated using MACRS (7-year property). Required: (a) Does Sec. 351 apply to this corporate formation? Explain why or why not. (b) For each shareholder: (1) compute their realized gain or loss (2) compute their recognized gain or loss (if any) (3) determine the character of the gain or loss (4) compute the basis for the stock received from the corporation (5) determine when the holding period begins for the stock (c) Prepare Celtics tax basis balance sheet as of September 9, 2010. (d) Determine how the corporation would treat the services provided by Dennis. (e) Describe in general terms how the results would change, if at all, for each shareholder if this corporate formation did not qualify for Sec. 351 treatment....
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- Summer '08