At the Beginning of the Year, Harold, Missy, and Ranae

question 122

Essay

At the beginning of the year, Harold, Missy, and Ranae formed HMR Corporation as an S corporation. For one-third of the HMR stock, Harold contributed $50,000 cash and land with a fair market value of $75,000 and adjusted tax basis of $60,000. The land was subject to a $45,000 mortgage, which was assumed by HMR on the formation. Missy and Ranae each contributed $80,000 cash to HMR for one-third of the HMR stock. What is Harold's basis in the HMR stock after the formation? What is Missy's basis in her HMR stock after the formation?

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Definitions:

Art Forms

Pertains to the various methods and structures through which artistic expression is realized, such as painting, sculpture, music, dance, and literature.

Abelam Mask

A traditional ceremonial mask created by the Abelam people of Papua New Guinea, often made from bamboo and painted with bright colors.

Uninitiated Males

Males who have not undergone certain rites of passage, ceremonies, or been introduced to specific knowledge or practices within a cultural or societal context.

Dilukai

A female figure with splayed legs, a common motif over the entrance to a Belau bai, serving as both guardian and fertility symbol.