Fran, George, and Helen Form FGH Corporation

question 40

Essay

Fran, George, and Helen form FGH Corporation. In exchange for 300 shares of stock of the corporation, Fran contributes property with a basis of $15,000, fair market value of $50,000 and subject to a liability of $20,000 which the corporation assumed. George contributes property with a basis of $20,000, fair market value of $30,000 in exchange for 250 shares of stock of the corporation with a value of $25,000 plus $5,000 cash. Helen performs services for the corporation and receives $2,000 worth of stock (20 shares) in exchange for the services.
a.What is the amount of Fran's recognized gain or loss on the transaction?
b.What is Fran's basis in the stock of the corporation?
c.What is the corporation's basis in the property received from Fran?
d.What is the amount of George's recognized gain or loss on the transaction?
e.What is George's basis in the stock of the corporation?

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Definitions:

Adolescent Changes

These are the physical, psychological, and social transformations that occur in individuals typically between ages 13 and 19.

Infancy

The early stage of childhood, typically from birth until around 2 years of age, during which rapid physical and cognitive development occurs.

Childhood Development

Refers to the physical, cognitive, and social growth that occurs from infancy through adolescence.

Industrial/Organizational Psychologists

Psychologists who apply psychological theories and principles to organizational issues, including workplace productivity, employee behavior, and the development of good hiring practices.