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Martha and Tom form the MT Corporation, with a transfer of the following properties:
Martha $1,200,000 cash
Tom $800,000 FMV property
$300,000 tax basis
Martha will receive 60% and Tom 40% of the corporate stock.
VARIATION 1: return to original facts (no Karla). Toms property is valued at $1,100,000 but is contributed subject to a $300,000 liability.
VARIATION 2: Same as Variation 1 except Toms property is valued at $1,200,000 and is contributed subject to a liability of $400,000.
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