corporate_formation - (adjusted basis $20,000) for 40...

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Topic: Corporate formation – Section 351 Moe, Larry, and Curley form a new corporation – MLC Inc. by contributing cash and property for 100 shares of MLC common stock. Moe contributed $40,000 cash for 20 shares, Larry contributed inventory worth $80,000 (adjusted basis $63,000) for 40 shares, and Curley contributed cash $10,000 and business property worth $70,000
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Unformatted text preview: (adjusted basis $20,000) for 40 shares. Required : [1] Does Sec. 351 apply to this corporate formation? [2] What is MLC’s initial balance sheet if Sec. 351 applies? [3] What gain (loss) is recognized by each shareholder and what are their bases in the MLC stock?...
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This note was uploaded on 09/09/2011 for the course TAX 6845 taught by Professor Kelliher,c during the Fall '08 term at University of Central Florida.

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