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Question Rafael transfers the following assets to Crane Corporation in exchange for all of its stock

Question Rafael transfers the following assets to Crane Corporation in exchange for all of its stock

Question

Rafael transfers the following assets to Crane Corporation in exchange for all of its stock.

Note: Assume that neither Rafael nor Crane plans to make any special tax elections at the time of incorporation.

Note: If an amount is zero, enter "0". Do not round any division.

a. Rafael's realized _________________ is $ _________________ . Of this amount, $ _________________ is recognized.

b. Assuming no election is made, Rafael's basis in the stock is $ _________________ .

c. Crane's basis is $ _________________ for inventory, $ _________________ for equipment, and $ _________________ for shelving.

d. If Rafael plans to hold his stock for a substantial period of time, he and Crane may elect to allow Crane _________________ a carryover basis in the assets received. Its basis in the assets would also change to $ _________________ for inventory, $ _________________ for equipment, and $ _________________ for shelving.

Assets

Rafael's Adjusted Basis

Fair Market Value

Inventory

$60,000

 

 

$100,000

 

 

Equipment

150,000

 

 

105,000

 

 

Shelving

80,000

 

 

65,000

 

 

 
manish jayant 22-Apr-2020

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