Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the corporation: Items transferred Basis Fair Market Value Number of Shares Issued From Elaine: Cash $60,000 $60,000 200 shares Equipment 30,000 340,000 From James: Land 100,000 540,000 200 shares Mortgage 140,000 140,000 From Jeremy: Office equipment 50,000 260,000* 100 shares Besides the receiving 100 shares of stock, Jeremy also received $60,000 of cash. Forest Corporation assumed the mortgage transferred by James.
Formation of a Corporation
Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the corporation:
Items transferred
Basis Fair Market Value Number of Shares Issued
From Elaine:
Cash $60,000 $60,000 200 shares
Equipment 30,000 340,000
From James:
Land 100,000 540,000 200 shares
Mortgage 140,000 140,000
From Jeremy:
Office equipment 50,000 260,000* 100 shares
Besides the receiving 100 shares of stock, Jeremy also received $60,000 of cash. Forest Corporation assumed the mortgage transferred by James.
Determine the amount of income, gain or loss (if any) that Elaine has from this transaction.
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