Required information Skip to question [The following information applies to the questions displayed below.] Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $205,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: FMV Adjusted Tax Basis Building $ 76,875 $ 20,500 Land 179,375 82,000 Total $ 256, 250 $ 102,500 To equalize the exchange, Wiley Corporation paid Hermione $51,250 in addition to her stock. c. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.
Required information Skip to question [The following information applies to the questions displayed below.] Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $205,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: FMV Adjusted Tax Basis Building $ 76,875 $ 20,500 Land 179,375 82,000 Total $ 256, 250 $ 102,500 To equalize the exchange, Wiley Corporation paid Hermione $51,250 in addition to her stock. c. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Required information Skip to question [The following information applies to the questions
displayed below.] Ramona and Hermione formed Wiley Corporation on January 2. Ramona
contributed cash of $205,000 in return for 50 percent of the corporation's stock. Hermione
contributed a building and land with the following fair market values and adjusted tax bases in
return for 50 percent of the corporation's stock: FMV Adjusted Tax Basis Building $ 76,875 $
20,500 Land 179,375 82,000 Total $ 256, 250 $ 102,500 To equalize the exchange, Wiley
Corporation paid Hermione $51,250 in addition to her stock. c. What amount of gain or loss does
Hermione realize on the formation of the corporation? What amount, if any, does she recognize?
Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a
minus sign.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F003942d8-6e99-4cc0-abfb-a56db4ef6814%2F41d7d930-c5fa-4224-9442-58d24a715831%2Fnw75vlp_processed.png&w=3840&q=75)
Transcribed Image Text:Required information Skip to question [The following information applies to the questions
displayed below.] Ramona and Hermione formed Wiley Corporation on January 2. Ramona
contributed cash of $205,000 in return for 50 percent of the corporation's stock. Hermione
contributed a building and land with the following fair market values and adjusted tax bases in
return for 50 percent of the corporation's stock: FMV Adjusted Tax Basis Building $ 76,875 $
20,500 Land 179,375 82,000 Total $ 256, 250 $ 102,500 To equalize the exchange, Wiley
Corporation paid Hermione $51,250 in addition to her stock. c. What amount of gain or loss does
Hermione realize on the formation of the corporation? What amount, if any, does she recognize?
Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a
minus sign.
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