Yang, Jane, and Li incorporated YJL Corp. Yang transferred equipment (FMV = $60,000, basis = $55,000) in exchange for 25% of YJL Corp.’s stock (FMV = $50,000) and $10,000 cash. Jane transferred land (FMV = $110,000; basis = $80,000) in exchange for 50% of YJL Corp.’s stock (FMV = $100,000) and $10,000 cash. Li contributed $50,000 cash in exchange for 25% of YJL Corp.’s stock (FMV = $50,000). Assume YJL Corp. is a controlled corporation of Yang, Jane, and Li. What is Yang’s basis in YJL Corp. stock? and What is YJL Corp’s basis in the equipment?
Yang, Jane, and Li incorporated YJL Corp. Yang transferred equipment (FMV = $60,000, basis = $55,000) in exchange for 25% of YJL Corp.’s stock (FMV = $50,000) and $10,000 cash. Jane transferred land (FMV = $110,000; basis = $80,000) in exchange for 50% of YJL Corp.’s stock (FMV = $100,000) and $10,000 cash. Li contributed $50,000 cash in exchange for 25% of YJL Corp.’s stock (FMV = $50,000). Assume YJL Corp. is a controlled corporation of Yang, Jane, and Li. What is Yang’s basis in YJL Corp. stock? and What is YJL Corp’s basis in the equipment?
Chapter4: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 1BCRQ
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Question
Yang, Jane, and Li incorporated YJL Corp.
Yang transferred equipment (FMV = $60,000, basis = $55,000) in exchange for 25% of YJL Corp.’s stock (FMV = $50,000) and $10,000 cash.
Jane transferred land (FMV = $110,000; basis = $80,000) in exchange for 50% of YJL Corp.’s stock (FMV = $100,000) and $10,000 cash.
Li contributed $50,000 cash in exchange for 25% of YJL Corp.’s stock (FMV = $50,000).
Assume YJL Corp. is a controlled corporation of Yang, Jane, and Li.
What is Yang’s basis in YJL Corp. stock?
and
What is YJL Corp’s basis in the equipment?
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