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Consideration Transferred Number of Shares Issued Basis to Fair Market Value Transferor From Janice- Cash $125,000 $125,000 Machinery 210,000 400,000 525 From Thom- Cash Building Land $200,000 390,000 110,000 $200,000 280,000 90,000 570
e. Thoms basis in the Conestoga Corporation stock is s
Conestoga Corporations basis in the building is X. Its basis in the land is
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Answers are highlighted in Green Solution: In this case, section 351 is being applicable. As per IRC 351, no gain or loss is recognized on contribution of property to a corporation in exchange of its shares, if, after contribution, that person or persons are in control (e.g. 80%). Therefore, Thoms Basis in the Coestoga Corp stock is -Carryover basis of contributor Coestoga corporation basis in Building- Carryover basis of contributor- Coestoga corporation basis in Land- Carryover basis of contributor 700000 (200000+390000+110000) 390000 110000

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