Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the corporation: Items transferred Basis Fair Market Value Number of Shares Issued From Elaine: $60,000 30,000 $60,000 340,000 Cash 200 shares Equipment From James: Land 100,000 140,000 540,000 140,000 200 shares Mortgage From Jeremy: Office equipment 50,000 260,000* 100 shares Besides the receiving 100 shares of stock, Jeremy also received $60,000 of cash. Forest Corporation assumed the mortgage transferred by James.
Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the corporation: Items transferred Basis Fair Market Value Number of Shares Issued From Elaine: $60,000 30,000 $60,000 340,000 Cash 200 shares Equipment From James: Land 100,000 140,000 540,000 140,000 200 shares Mortgage From Jeremy: Office equipment 50,000 260,000* 100 shares Besides the receiving 100 shares of stock, Jeremy also received $60,000 of cash. Forest Corporation assumed the mortgage transferred by James.
Chapter4: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 19CE
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Question
Determine the amount of income, gain or loss (if any) that Elaine has from this transaction.
Transcribed Image Text:Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the
corporation:
Items transferred
Basis
Fair Market Value
Number of Shares
Issued
From Elaine:
Cash
Equipment
$60,000
30,000
$60,000
340,000
200 shares
From James:
Land
Mortgage
100,000
140,000
200 shares
540,000
140,000
From Jeremy:
Office equipment
50,000
260,000*
100 shares
Besides the receiving 100 shares of stock, Jeremy also received $60,000 of cash. Forest
Corporation assumed the mortgage transferred by James.
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ISBN:
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Author:
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Publisher:
CENGAGE LEARNING - CONSIGNMENT