Addy, Anderson, and Andrew decided to form a corporation together. They name the company XYZ...
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Accounting
Addy, Anderson, and Andrew decided to form a corporation together. They name the company XYZ Inc.
Addy contributes his office building (purchased 2 years ago at $550k and now worth $600k) and receives 60% of the stock in XYZ Inc.
Anderson contributes $100k cash and receives 10% of the stock.
Andrew received 30% of the remaining stock for providing his service as the companys CEO.
- Do Addy have to realize the gain he realized on his contribution of the office building to XYZ Inc.?
- Calculate the amount of gain/loss that Addy must realize?
- Calculate the shareholder basis of the stock that Addy received.
- Calculate the corporation basis of the property that the corp. received from Addy.
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