Baxter Corporation Transfers Assets with an Adjusted Basis of $300,000

question 64

Essay

Baxter Corporation transfers assets with an adjusted basis of $300,000 and an FMV of $500,000 to Duke Corporation for 90% of Duke's single class of stock worth $500,000. The Duke stock is then exchanged for Frank's 50% interest in Baxter Corporation. Frank's basis in the Baxter stock he surrenders is $120,000. What is Duke Corporation's basis in the assets it receives?

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Definitions:

PB2

PB2 often refers to a secondary or specific pushbutton in a system, indicating its role or position within a sequence of controls.

Retentive On-Delay

A timing function in control systems that starts counting upon receiving an input signal and retains its timing value across power cycles, activating its output after a set delay.

Retentive Timer

A type of PLC timer that retains its value even after the power is turned off or the controlling logic is no longer true.