In March of Year 2, Mason contributed the following two properties, which he acquired in February of Year 1, to Boston Corporation in exchange for additional Boston stock: (1) land having a $45,000 FMV and a $78,000 basis and (2) another property having an $81,000 FMV and a $77,000 adjusted basis. Boston' employees use the land as a parking lot until Boston sells it in March of Year 3 for $43,000. One month after the sale, in April of Year 3, Boston adopts a plan of liquidation. (Assume that the properties were contributed to Boston in a Sec. 351 transaction. Assume that the second property contributed by Mason was not land.) Read the requirements. (Enter all amounts, even losses, as a positive number.) Requirement c. How would your answer to Part b change if the land were not used in Boston' trade or business? If the land were not used in Boston' trade of business, Boston recognizes a gain/loss on the subsequent sale of land.
In March of Year 2, Mason contributed the following two properties, which he acquired in February of Year 1, to Boston Corporation in exchange for additional Boston stock: (1) land having a $45,000 FMV and a $78,000 basis and (2) another property having an $81,000 FMV and a $77,000 adjusted basis. Boston' employees use the land as a parking lot until Boston sells it in March of Year 3 for $43,000. One month after the sale, in April of Year 3, Boston adopts a plan of liquidation. (Assume that the properties were contributed to Boston in a Sec. 351 transaction. Assume that the second property contributed by Mason was not land.) Read the requirements. (Enter all amounts, even losses, as a positive number.) Requirement c. How would your answer to Part b change if the land were not used in Boston' trade or business? If the land were not used in Boston' trade of business, Boston recognizes a gain/loss on the subsequent sale of land.
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 55P
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Transcribed Image Text:In March of Year 2, Mason contributed the following two properties, which he acquired in February of Year 1, to Boston Corporation in exchange for additional Boston
stock: (1) land having a $45,000 FMV and a $78,000 basis and (2) another property having an $81,000 FMV and a $77,000 adjusted basis. Boston' employees use the
land as a parking lot until Boston sells it in March of Year 3 for $43,000. One month after the sale, in April of Year 3, Boston adopts a plan of liquidation. (Assume that
the properties were contributed to Boston in a Sec. 351 transaction. Assume that the second property contributed by Mason was not land.)
Read the requirements.
(Enter all amounts, even losses, as a positive number.)
Requirement c. How would your answer to Part b change if the land were not used in Boston' trade or business?
If the land were not used in Boston' trade of business, Boston recognizes a
gain/loss
on the subsequent sale of land.
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ISBN:
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Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT