A Corp. was incorporated in 2017. In 2019, Abel transferred machinery worth $200,000 (basis of $30,000) to A Corp. in exchange for 50% of A Corp.’s stock (FMV = $200,000). The transfer was not part of an integrated transaction, and the remaining 50% of A Corp.’s stock is owned by several other shareholders, all of whom acquired their shares during A Corp.’s initial incorporation in 2017.What is Abel’s basis in his A Corp. stock?
A Corp. was incorporated in 2017. In 2019, Abel transferred machinery worth $200,000 (basis of $30,000) to A Corp. in exchange for 50% of A Corp.’s stock (FMV = $200,000). The transfer was not part of an integrated transaction, and the remaining 50% of A Corp.’s stock is owned by several other shareholders, all of whom acquired their shares during A Corp.’s initial incorporation in 2017.What is Abel’s basis in his A Corp. stock?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A Corp. was incorporated in 2017. In 2019, Abel transferred machinery worth $200,000 (basis of $30,000) to A Corp. in exchange for 50% of A Corp.’s stock (FMV = $200,000). The transfer was not part of an integrated transaction, and the remaining 50% of A Corp.’s stock is owned by several other shareholders, all of whom acquired their shares during A Corp.’s initial incorporation in 2017.What is Abel’s basis in his A Corp. stock?
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