Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $305,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Adjusted Tax Basis FMV $ 114,375 266,875 $ 30,500 122,000 Building Land Total $ 381,250 $ 152,500 To equalize the exchange, Wizard Corporation paid Hermione $76,250 in addition to her stock. Assume Hermione's adjusted tax basis in the land was $305,000. g. What adjusted tax basis does Wizard Corporation take in the land and building received from Hermione? Land Building Adjusted tax basis 2$ 53,375
Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $305,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Adjusted Tax Basis FMV $ 114,375 266,875 $ 30,500 122,000 Building Land Total $ 381,250 $ 152,500 To equalize the exchange, Wizard Corporation paid Hermione $76,250 in addition to her stock. Assume Hermione's adjusted tax basis in the land was $305,000. g. What adjusted tax basis does Wizard Corporation take in the land and building received from Hermione? Land Building Adjusted tax basis 2$ 53,375
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 54P
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![Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $305,000 in return for 50 percent of
the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax
bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative
amount should be indicated by a minus sign.)
Adjusted Tax
FMV
Basis
Building
$ 114,375
266,875
$ 381,250
$30,500
Land
122,000
$ 152,500
Total
To equalize the exchange, Wizard Corporation paid Hermione $76,250 in addition to her stock.
Assume Hermione's adjusted tax basis in the land was $305,000.
g. What adjusted tax basis does Wizard Corporation take in the land and building received from Hermione?
Land
Building
Adjusted tax basis
$
53,375](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F195bb005-d4df-48e4-b413-b8a80fbd65f6%2Fe0444d87-68f7-4038-8621-04af6c7e4c7b%2Fuvvdgf_processed.png&w=3840&q=75)
Transcribed Image Text:Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $305,000 in return for 50 percent of
the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax
bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative
amount should be indicated by a minus sign.)
Adjusted Tax
FMV
Basis
Building
$ 114,375
266,875
$ 381,250
$30,500
Land
122,000
$ 152,500
Total
To equalize the exchange, Wizard Corporation paid Hermione $76,250 in addition to her stock.
Assume Hermione's adjusted tax basis in the land was $305,000.
g. What adjusted tax basis does Wizard Corporation take in the land and building received from Hermione?
Land
Building
Adjusted tax basis
$
53,375
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