The point here is to be able use sec 351, 1031 and calculate corporation basis and shareholder basis. I have my own calculation, but i just want to comapre with your's!
Mr. X, Y, and Z organize the Alpha Corporation as a result of the following transfers:
Property Transferred FMV Stock Boot
Received
ADJ Basis
Mr. X Machinery 30,000 60,000 -0-
Cash 20,000
Mr. Y Building 80,000 60,000 -0-
Mortgage 100,000
Mr. Z Furniture 70,000 60,000 30,000
What is the recognized gain or loss to Mr. X, Y, and Z?
What will be the basis of the stock received by each shareholder?
What basis will Alpha Corp. have in the property acquired from each shareholder?