Fred, Barney, and Wilma form Hard Rock, Inc., to manufacture gravel. They contribute the following in...

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Accounting

Fred, Barney, and Wilma form Hard Rock, Inc., to manufacturegravel. They contribute the following in exchange for equal sharesof stock:
Shareholder   Property                                 FMV              AB
Fred                Cash                                       $50,000          $50,000
                       Property                                 $50,000          $5,000
                     Debt                                      $10,000
Barney           Stocks                                    $90,000          $80,000
Wilma            Equipment                             $90,000          $45,000
Betty also provides accounting services in exchange for 10% ofthe stock.
Fred and Wilma are married, as are Barney and Betty.
1. What are the tax consequences to Fred?
2. What are the tax consequences to Barney?
3. What are the tax consequences to Wilma?
4. What are the tax consequences to Betty?
5. What basis will Fred take in the stock?
6. What basis will Barney take in the stock?
7. What basis will Wilma take in the stock?
8. What basis will Betty take in the stock?

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Answer Fred Barney and Wilma form Hard Rock Inc They contribute exchange for equal shares of stock Betty also provides accounting services in exchange for 10 of the stock This implies Fred Barney and Wilma have 30 share each and Betty gets 10 See Answer

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