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Question 1 Penny, Miesha, and Sabrina transfer property to Owl Corporation for 75% of its stock.

Question 1
Penny, Miesha, and Sabrina transfer property to Owl Corporation for 75% of its stock. Nancy, their attorney, receives 25% of the stock in Owl for legal services rendered in incorporating the business. What are the tax consequences of these transactions? How should this be handled?










Question 2
What are the tax consequences if an individual investor incurs a loss on the following:

a. Stock that is not § 1244 stock.

b. Stock that is § 1244 stock.

c. Corporate bond.

d. An uncollectible loan made to a corporation.









Question 3
Nick exchanges property (basis of $100,000; fair market value of $3,000,000), for 75% of the stock of Yellow Corporation. The other 25% of the stock is owned by Gloria who acquired it several years ago. What are the tax consequences to Nick?

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