On January 7, 2022, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are: Shareholder's Fair Market Built in Gain Basis Value or (Loss) Property 1 Property 2 $551,000 $661,200 $110,200 $936,700 $716,300 Net built-in loss ($220,400) ($110,200) Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 25% shareholder when the property is worth $606,100. a. Compute Martin's basis in Property 1 and in Property 2 as of January 7, 2022. Martin's basis is Property 1 is a carryover Martin's basis in Property 2 is a stepped-down basis of $ 551,000. basis of $ 826,500 . b. Compute Martin's realized and recognized loss on the liquidating distribution of Property 2. 110,200 Martin has a realized loss of $ and a recognized loss of $ ✔.

On January 7, 2022, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are: Shareholder's Fair Market Built in Gain Basis Value or (Loss) Property 1 Property 2 $551,000 $661,200 $110,200 $936,700 $716,300 Net built-in loss ($220,400) ($110,200) Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 25% shareholder when the property is worth $606,100. a. Compute Martin's basis in Property 1 and in Property 2 as of January 7, 2022. Martin's basis is Property 1 is a carryover Martin's basis in Property 2 is a stepped-down basis of $ 551,000. basis of $ 826,500 . b. Compute Martin's realized and recognized loss on the liquidating distribution of Property 2. 110,200 Martin has a realized loss of $ and a recognized loss of $ ✔.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 15CE

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On January 7, 2022, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are: Shareholder's Fair Market Built in Gain Basis Value or (Loss) Property 1 $471,800 $566,160 $94,360 Property 2 $802,060 $613,340 ($188,720) Net built-in loss ($94,360) Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 45% shareholder when the property is worth $518,980. a. Compute Martin's basis in Property 1 and in Property 2 as of January 7, 2022. Martin's basis is Property 1 is a Martin's basis in Property 2 is a basis of $ basis of $ b. Compute Martin's realized and recognized loss on the liquidating distribution of Property 2. Martin has a realized loss of $ and a recognized loss of $
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12 Required information Problem 19-39 (LO 19-2) [The following information applies to the questions displayed below.] Part 7 of 7 Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted bases: polnts Adjusted Basis $ 24,000 240,000 FMV $ 48,000 Inventory Building 360,000 552,000 Land 720,000 eBook Total $960,000 $984,000 References The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $860,000. The transaction met the requirements to be tax-deferred under $351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) Problem 19-39 Part g Assume the corporation assumed a mortgage of $1,060,000 attached to the building and land.…
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