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Corp Fed Tax

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Question Details:
Gail and Mark from Sap Corp with the following considerations:


Consideration Transferred


Basis to Fair Market Number of


Transferor Value Shares Issued


From Mark


Cash $50,000 50,000


installment obligation 140,000 250,000 30


From Gail


Cash 150,000 150,000


equipment 125,000 250,000


patent 10,000 300,000 70


The installment obligation has a face amount of $250,000 and was acquired last year from the sale of land held for inventment purposes (adjusted basis of $140,000). As to these transactions, provide the following information


a) Marks recognized gain or loss


b) Marks basis in the Sap Corp stock


c) Sap Corp basis in the installment obligation


d) Gails recognized gain or loss


e) Gail's basis in the Sap Corp stock


f) Sap Corp basis in the equipment and the patent


g) How would your answers to the preceding questions change if Mark received common stock and Gail received preferred stock?


h) How would you answers change if Gail was a partnership?

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