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Required information [The following information applies to the questions displayed below.] Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted bases in return for 50 percent of the corporation's stock: Building Land Total FMV $ 75,000 175,000 $250,000 To equalize the exchange, Wizard Corporation paid Hermione $50,000 in addition to her stock. Adjusted basis Assume Hermione's adjusted basis in the land was $250,000. i. What adjusted basis does Wizard Corporation take in the land and building received from Hermione? (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Tax- Adjusted Basis $ 20,000 80,000 $100,000 Land $ Building 20,000

Required information [The following information applies to the questions displayed below.] Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted bases in return for 50 percent of the corporation's stock: Building Land Total FMV $ 75,000 175,000 $250,000 To equalize the exchange, Wizard Corporation paid Hermione $50,000 in addition to her stock. Adjusted basis Assume Hermione's adjusted basis in the land was $250,000. i. What adjusted basis does Wizard Corporation take in the land and building received from Hermione? (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Tax- Adjusted Basis $ 20,000 80,000 $100,000 Land $ Building 20,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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! Required information [The following information applies to the questions displayed below.] Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted bases in return for 50 percent of the corporation's stock: Building Land Total FMV $ 75,000 175,000 $250,000 To equalize the exchange, Wizard Corporation paid Hermione $50,000 in addition to her stock. Adjusted basis Assume Hermione's adjusted basis in the land was $250,000. i. What adjusted basis does Wizard Corporation take in the land and building received from Hermione? (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Tax- Adjusted Basis $ 20,000 80,000 $100,000 Land $ Building 20,000
Transcribed Image Text:! Required information [The following information applies to the questions displayed below.] Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted bases in return for 50 percent of the corporation's stock: Building Land Total FMV $ 75,000 175,000 $250,000 To equalize the exchange, Wizard Corporation paid Hermione $50,000 in addition to her stock. Adjusted basis Assume Hermione's adjusted basis in the land was $250,000. i. What adjusted basis does Wizard Corporation take in the land and building received from Hermione? (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Tax- Adjusted Basis $ 20,000 80,000 $100,000 Land $ Building 20,000
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