Problem
1) You and a developer get together to form a corporation that will build a shopping mall on some land you own near a major planned interchange of 1-540. The developer contributes $10 million in cash, receiving 50% of the stock of the corporation, while you contribute the land in exchange for the other 50%. Your basis in the land is $100,000. What will your taxable gain be in the transaction?
2) In the question immediately above, what will your basis be in the stock received?
3) Same as above, but now you receive 50% of the stock of the corporation and $1 million in cash. The developer contributes $9 million to the corporation in exchange for 50% of the stock. What will your taxable gain be in the transaction?
4) In the question immediately above, what will your basis be in the stock received?