Thomas Jefferson School of Law

Thomas Jefferson School of Law

You are an attorney at the ABC law firm and a partner comes and plops a file on your desk and says “I need this by Sunday, send me a memo saying what tax rules are applicable here only in regards to what you learned in Prof Fiske’s Weeks 3 and 4 in Corporate Taxation.  The memo should include your advice on what we should do, but should analyze multiple scenarios.  Act like I have no idea what you are talking about (you wonder if he actually doesn’t).  Oh, and don’t make it more than 3 pages double spaced and times new roman font.  I hate it when it is anything longer…I definitely don’t want to read more than that!” 

You open the file and see that Joe, Kim and Elliot want to start “Hamburgers R Us Inc.” a corporation in your state.  They would like to contribute the following:

Joe: Property with a FMV of $200k and an adjusted basis of $35k.

Kim:  Cash of $100k and a piece of property with a FMV of $100k and an adjusted basis of $90k.

Elliot:  Services with a FMV of $200k