[The following information applies to the questions displayed below.] 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 Land $ 114,375 266,875 $ 381,250 $ 30,500 122,000 Total $ 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 $381,250. i. What adjusted tax basis does Wizard Corporation take in the land and building received from Hermione? Land Building Adjusted tax basis $ 53,375
[The following information applies to the questions displayed below.] 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 Land $ 114,375 266,875 $ 381,250 $ 30,500 122,000 Total $ 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 $381,250. i. What adjusted tax basis does Wizard Corporation take in the land and building received from Hermione? Land Building Adjusted tax basis $ 53,375
Chapter18: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 30P
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![[The following information applies to the questions displayed below.]
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
$ 114,375
266,875
$ 381,250
$ 30,500
122,000
$ 152,500
Building
Land
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 $381,250.
i. 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%2F20a36698-e4db-4d51-9029-75af04993793%2F38f77080-3dc9-4084-abab-09246fa8195d%2Fobtk3qq_processed.png&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
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
$ 114,375
266,875
$ 381,250
$ 30,500
122,000
$ 152,500
Building
Land
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 $381,250.
i. 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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