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Sophia and William Form the Bobwhite Corporation with the Following

question 24

Essay

Sophia and William form the Bobwhite Corporation with the following investments:
Basis
Fair Market Value
From Sophia-
Cash
$300,000
$300,000
From William-
Land
280,000
350,000

Each person is issued one-half of Bobwhite's stock and,in addition,William receives cash of $50,000.

a.
How much gain,if any,must William recognize and what basis does he have in the Bobwhite stock?
b.What is Bobwhite's basis in the land?


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