[YouCanDoIt]

From my understanding, formations= non-taxable events, IF (i) there is a >= 80% control
and (ii) No receipt of boot (cash and/or excess debt put into corp.)

So, how do you treat a taxable (?) transaction with both cash and debt?

Al and Bob formed a corporation.
Al contributed–> Bldg. @ adjusted basis $40,000
Mortgage on bldg $10,000
The corporation in return gave Al 90% interest (fmv @ $90,000) and $6,000 cash.

1) Realized gain by AL?
2) Recognized gain by AL?
3) Al’s basis in stock?
4) Corp’s basis in the building?

FAR: 76
REG: Currently studying
AUD:
BEC:

[YouCanDoIt]

Also, forgot building's FMV= $70,000

FAR: 76
REG: Currently studying
AUD:
BEC:

[Author]

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