Sam, Paul, Carlos and Jai form Pinochle Corporation by contributing the following assets to Pinochle: # of Shares Other Prop. Rec' by S/H Basis to Fair Market Transferor Value Issued Sam contributes: Inventory $30,000 $96,000 30 $6,000 Cash Paul contributes: $45,000 Paul had taken $30,000 of depreciation in prior years Equipment $99,000 30 $9,000 Cash Carlos Secret Formula $15,000 $90,000 30 Jai Cash $30,000 $30,000 10 a. What is Sam's recognized gain related to this transaction? b. What is Seth's basis in his Pinochle stock? c. What is Pinochle's basis in the inventory? d. What Is Paul's recognized gain or loss? e. Is Paul's' gain or loss capital or ordinary? f. What is Paul's basis in his Pinochle stock? g. What is Pinochle's basis in the equipment? h. What is Carlos' recognized gain on the transaction? i. What is Pinochle's basis in the secret formula? j. What is Jai's recognized gain or loss? k. What is Jai's basis in his Pinochle stock?

Munabhai

Corporate Organization Exercise Kathy and Carl formed a corporation by each contributing an asset with a FMV of $50,000 for half of the stock in the corporation. Prior to the transfer, Kathy had an adjusted basis of $40,000 in her asset and Carl had an adjusted basis of $60,000 in his asset.   h. Does Carl have any positive or negative consequences if the corporation sells Kathy's asset for $50,000 ? Quantify the impact assuming the corporation's marginal tax rate is 21%. Answer the following assuming Carl and the corporation did not make the election i. What is Carl's realized loss on the transaction?

What is Elaine’s basis in her Forest Corporation stock?