Dennis contributed business assets to a new business in exchange for stock in the company. The exchange did not qualify as a tax- deferred exchange. The fair market value of these assets was $367,000 on the contribution date. Dennis's original basis in the assets he contributed was $216,000, and the accumulated depreciation on the assets was $122,250. Required a. What is the business's basis in the assets it received from Dennis? b. What would be the business's basis if the transaction qualified as a tax-deferred exchange? a. Business's basis b. Business's basis
Dennis contributed business assets to a new business in exchange for stock in the company. The exchange did not qualify as a tax- deferred exchange. The fair market value of these assets was $367,000 on the contribution date. Dennis's original basis in the assets he contributed was $216,000, and the accumulated depreciation on the assets was $122,250. Required a. What is the business's basis in the assets it received from Dennis? b. What would be the business's basis if the transaction qualified as a tax-deferred exchange? a. Business's basis b. Business's basis
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Dennis contributed business assets to a new business in exchange for stock in the company. The exchange did not qualify as a tax-
deferred exchange. The fair market value of these assets was $367,000 on the contribution date. Dennis's original basis in the assets
he contributed was $216,000, and the accumulated depreciation on the assets was $122,250.
Required
a. What is the business's basis in the assets it received from Dennis?
b. What would be the business's basis if the transaction qualified as a tax-deferred exchange?
a. Business's basis
b. Business's basis
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