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.
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.
What is Elaine’s basis in her Forest Corporation stock?
Determine the amount of income, gain or loss (if any) that James has from this transaction.
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