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Mickey, Mickayla, and Taylor are starting a new business (MMT). To get the business started, Mickey...

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Finance

Mickey, Mickayla, and Taylor are starting a new business (MMT).To get the business started, Mickey is contributing $235,000 for a40 percent ownership interest, Mickayla is contributing a buildingwith a value of $235,000 and a tax basis of $158,750 for a 40percent ownership interest, and Taylor is contributing legalservices for a 20 percent ownership interest. What amount of gainis each owner required to recognize under each of the followingalternative situations? [Hint: Look at §351 and §721.](Leave no answer blank. Enter zero ifapplicable.)

a. MMT is formed as a C corporation.

b. MMT is formed as an S corporation.

c. MMT is formed as an LLC.

Find the Gain to be recognized for A throughC

Answer & Explanation Solved by verified expert
3.9 Ratings (504 Votes)
Solution Calculation of Gain Contribution of Mickey 235000 for 40 ownership Interest Total value of business 23500040 587500 Share of taylor 58750020 117500    See Answer
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