Corporate Formations Problem Mary and Todd form the MT Corporation, with a transfer of the...
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Accounting
Corporate Formations Problem
Mary and Todd form the MT Corporation, with a transfer of the following properties:
Mary $3,000,000 cash
Todd $3,000,000 FMV property
$2,300,000 tax basis
Both Mary and Todd receive a 50% interest in the corporate stock.
Complete the following
Mary Todd
Realized gain ________ ________
Recognized gain ________ _________
Basis of Stock _________ _________
MT basis in contributed asset __________ _________
VARIATION 1: In addition to Mary and Todd, Karla joins the corporation at its inception. Karla will provide services to the corporation in exchange for a 22% interest in the stock. That is, she receives 22% of the outstanding shares. Does anything change? Why or why not? CHECK THE BOOK AS A SOURCE
VARIATION 2: return to original facts (no Karla). Todds property is valued at $3,800,000 but is contributed subject to a $800,000 liability.
Complete the following
Mary Todd
Realized gain ________ ________
Recognized gain ________ _________
Basis of stock _________ _________
MT basis in contributed asset __________ _________
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