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Sam owns 100% of M Corporation?s single class of s...

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Question

Sam owns 100% of M Corporation?s single class of stock. Sam transfers land and a building having a $30,000 and $100,000 adjusted basis, respectively, to M Corporation in exchange for additional M Corporation common stock worth $200,000 and IBM stock worth $20,000. The IBM stock had a $5,000 basis on M Corporation?s books. Peter transfers $50,000 in cash for 15% of the M Corporation common stock. What amount of gain or loss is recognized by Sam and M Corporation on the exchange? Please inclue the rule (i.e. IRC code section) with analysis of case.

 

Paper#1991 | Written in 18-Jul-2015

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