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Jen and Sue form Brown Corporation. Jen transfers land(basis of $55,000 and fair market va

Jen and Sue form Brown Corporation. Jen transfers land(basis of $55,000 and fair market value of $200,000) for 50% of the stock in Brown Corporation (stock valued at $100,00) and cash of $60,000. The land is subject to a mortgage of $40,000, which is also transferred to Brown Corporation. Sue transfers machinery (basis of $10,000 and fair market value of $30,000), and agrees to serve as manager of Brown Corporation for one year for the other 50% of the stock (stock value at $100,000). Solve the following tax consequences of the transaction (show all calculations): a. Jen's recognized gain b. Jen's stock basis following the transaction c. Sue's recognized gain d. Sue's stock basis following the transaction

 

Dec 04 2019 View more View Less

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