Required information [The following information applies to the questions displayed below.] Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $220,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: Building Land Total FMV $82,500 192,500 $ 275,000 Adjusted Tax Basis $ 22,000 88,000 $ 110,000 To equalize the exchange, Wiley Corporation paid Hermione $55,000 in addition to her stock. h. Assume Hermione's adjusted tax basis in the land was $275,000. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recogniz Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. X Answer is not complete.
Required information [The following information applies to the questions displayed below.] Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $220,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: Building Land Total FMV $82,500 192,500 $ 275,000 Adjusted Tax Basis $ 22,000 88,000 $ 110,000 To equalize the exchange, Wiley Corporation paid Hermione $55,000 in addition to her stock. h. Assume Hermione's adjusted tax basis in the land was $275,000. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recogniz Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. X Answer is not complete.
Chapter18: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 30P
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Question
4A
![Required information
[The following information applies to the questions displayed below.]
Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $220,000 in return for 50
percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and
adjusted tax bases in return for 50 percent of the corporation's stock:
Building
Land
Total
FMV
$ 82,500
192,500
$ 275,000
Adjusted Tax
Basis
$ 22,000
88,000
$ 110,000
To equalize the exchange, Wiley Corporation paid Hermione $55,000 in addition to her stock.
h. Assume Hermione's adjusted tax basis in the land was $275,000.
What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize?
Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.
Gain or loss realized
Gain or loss recognized
X Answer is not complete.
$
(22,000)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F33ec556a-d5c7-46f0-911c-7cb8d76ff1c9%2F75d6acf9-e31b-4fb6-a40a-97122a68e52c%2F6au28jo_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $220,000 in return for 50
percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and
adjusted tax bases in return for 50 percent of the corporation's stock:
Building
Land
Total
FMV
$ 82,500
192,500
$ 275,000
Adjusted Tax
Basis
$ 22,000
88,000
$ 110,000
To equalize the exchange, Wiley Corporation paid Hermione $55,000 in addition to her stock.
h. Assume Hermione's adjusted tax basis in the land was $275,000.
What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize?
Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.
Gain or loss realized
Gain or loss recognized
X Answer is not complete.
$
(22,000)
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