Question

Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $160,800 in exchange for 400 shares of stock. Ethan contributes an installment note receivable (basis $25,000; fair market value $30,000), land (basis $50,000; fair market value $170,000), and inventory (basis $354,560; fair market value $443,200) in exchange for 1,600 shares.

Determine Marie and Ethan's current income, gain, or loss and calculate the basis that each takes in the Roundtree stock.

If an amount is zero, enter "0".

Marie has income of $______ and $ _______ basis in her 400 shares of stock and Ethan has income
of $______ and $________ basis in his 1,600 shares of stock.

Answer 1

solution Marie has a Income because she gete vas a remunaration of her personal services provide to Corporation She has a basse equal to falur market value ie 160800 2) Ethan gets share in the return of note receivable, land and Inventory provided to corporation, Balls = = 25000 + 50000 + 354560 429560. * Marie has Income of 160800 and 160800 basis in her 400 shares of stock and Ethan has a Income of o and 429560 basie in heq 1600 shares of stock.