Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land wi the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount shoul be indicated by a minus sign.) Adjusted
Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land wi the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount shoul be indicated by a minus sign.) Adjusted
Chapter1: Financial Statements And Business Decisions
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Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000
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: (Leave no answer blank. Enter zero if applicable. Negative amount should
be indicated by a minus sign.)
Building
Land
Total
Adjusted
Tax Basis
FMV
$ 20,000
$ 75,000
175,000
80,000
$ 250,000 $ 100,000
To equalize the exchange, Wizard Corporation paid Hermione $50,000 in addition to her stock.
Problem 19-43 Part i (Static)
Adjusted tax basis
Assume Hermione's adjusted tax basis in the land was $250,000.
i. What adjusted tax basis does Wizard Corporation take in the land and building received from Hermione?
Land
S
4
Building
35,000
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