Mr. Rogers transferred 100 percent of his stock in Mr. Rogers Neighborhood Company to PBs Television Corporation in a Type A merger. In exchange he received stock in PBS with a fair market value of $1,000,000 plus $500,000 in cash. Mr. Roger's tax basis in the Mr. Roger's Neighborhood stock was $300,000. What is Mr. Roger's basis in the PBS Television stock he receives in the merger?
Mr. Rogers transferred 100 percent of his stock in Mr. Rogers Neighborhood Company to PBs Television Corporation in a Type A merger. In exchange he received stock in PBS with a fair market value of $1,000,000 plus $500,000 in cash. Mr. Roger's tax basis in the Mr. Roger's Neighborhood stock was $300,000. What is Mr. Roger's basis in the PBS Television stock he receives in the merger?
Chapter18: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 19CE
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Transcribed Image Text:Mr. Rogers transferred 100 percent of his stock in Mr. Rogers Neighborhood Company to PBSS
Television Corporation in a Type A merger.
In exchange he received stock in PBS with a fair market value of $1,000,000 plus $500,000 in cash.
Mr. Roger's tax basis in the Mr. Roger's Neighborhood stock was $300,000.
What is Mr. Roger's basis in the PBS Television stock he receives in the merger?
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