| | | Basis | FMV | # Shares |
| Tom's Contributions |
| | Cash | $50,000 | $50,000 | 40 |
| | Installment Note | $240,000 | $350,000 |
| Gails' Contributions |
| | Inventory | $60,000 | $50,000 | 60 |
| | Equipment | $125,000 | $250,000 |
| | Patentable Invention | $15,000 | $300,000 |
| Please write your solution in the yellow areas below the question. |
| The installment note has a face amount of $350,000 and was acquired last year from the sale of land held for investment purposes (adjusted basis of $240,000). As to these transactions, provide the following information: |
| a | Tom’s recognized gain or loss. |
| b | Tom’s basis in the Owl Corporation stock. |
| c | Gail’s recognized gain or loss. |
| d | Owl Corporation’s basis in the inventory, equipment, and the patentable invention. |
| e | Gail’s basis in the Owl Corporation stock. |
| h | How would your answers change if Gail was a partnership? |
Hughe037
week_1_option_2.xlsx
