C12-Chp-04-1D-Corp-Formation-2012-Handout

C12-Chp-04-1D-Corp-Formation-2012-Handout - Chapter 4D....

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Chapter 4D. Corporate Formation C12-Chp-04-3-Class Exercise on Cont to Corp
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Transfer of Assets to Controlled Corp. Ted transfers land with a basis of $800,000 a FMV of $1,200,000 to new corporation in exchange for all of the stock of the new corp. Case 1 Case 2 Case 3 Ted owned a land with basis of $800,000 $800,000 $800,000 Land-Basis Ted's land had a FMV of 1,200,000 1,200,000 1,200,000 Land-FMV Debt on land (assumed by corp) 0 300,000 1,100,000 Land-Debt Ted receives stock (100%) - FMV 1,200,000 900,000 100,000 Stock-FMV Ted's realized gain? 1001 Ted's "recognized" gain? 351, 357 Ted’s basis in stock received? 358 Corportion's recognized gain? 118, 1032 Corporation’s basis in land? 362
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1. Shareholder gain or loss? Case 1 1001 Amount realized by Ted: 1.1001-1 Stock received by Ted-FMV $1,200,000 1.1001-2(a) Value of other assets received Decrease in Ted's debt 0 357(a) Total value received $1,200,000 Basis Given by Ted: Cash given by Ted Basis of other assets given Total basis given by Ted Gain Realized by Ted 1001 Gain "Recognized" by Ted 351, 357(c)
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1. Shareholder gain or loss?
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C12-Chp-04-1D-Corp-Formation-2012-Handout - Chapter 4D....

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