Joe contributes depreciable equipment with a tax basis of $80,000 and FMV of $150,000 in...
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Joe contributes depreciable equipment with a tax basis of $80,000 and FMV of $150,000 in a transaction that qualifies for section 351. Assume the original basis of the equipment was $120,000 and thus there is 40,000 in accumulated depreciation. In exchange for the contribution, Joe receives 75,000 in stock and 75,000 in cash.Â
What is Joe’s recognized gain (including character) and what is his stock basis?
Joe contributes depreciable equipment with a tax basis of $80,000 and FMV of $150,000 in a transaction that qualifies for section 351. Assume the original basis of the equipment was $120,000 and thus there is 40,000 in accumulated depreciation. In exchange for the contribution, Joe receives 75,000 in stock and 75,000 in cash.Â
What is Joe’s recognized gain (including character) and what is his stock basis?
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