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Problem 12-16 (LO. 2, 4) Seth, Pete, Cara, and Jen form Kingfisher Corporation with the following consideration: Consideratioif there is no gain or loss, enter $0 for the amount. As to these transactions, provide the following information for parts (e. Petes basis in the Kingfisher Corporation stock. $ 45,000 Feedback f. Kingfisher Corporations basis in the equipment. $h. Caras basis in the Kingfisher Corporation stock. $ 15,000 Feedback i. Kingfisher Corporations basis in the proprietary pI. During discussions relating to the formation of Kingfisher, Seth mentions that he may be interested in either (1) just sel

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Answer #1

Answer to L since rest are correct:

Amount on sale = 90,000

Adjusted basis = 30,000

Ordinary gain = 90,000 - 30,000 = 60,000

Tax cost (15%) = 60,000 *15% = 9000

Present value of tax cost = (9000 * 0.7473 )+ (6000*35%) = 6726 + 2100 = 8826

Ans : $8,826

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