Barry and Irv Form Swift Corporation

question 74

Essay

Barry and Irv form Swift Corporation. Barry transfers cash of $100,000 and equipment (basis of $300,000 and fair market value of $400,000)for 50% of Swift's stock. Irv transfers land and building (basis of $510,000 and fair market value of $450,000)and agrees to manage the business for one year for the other 50% of Swift's stock. The value of Irv's services for one year is $50,000.
a.What is Barry's recognized gain? Basis in the Swift Corporation stock?
b.What are the tax consequences to Irv?
c.What are the tax consequences to Swift Corporation?

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Definitions:

Economic-Based Affirmative Action

Affirmative action policies focused on improving opportunities for individuals from economically disadvantaged backgrounds, regardless of race or ethnicity.

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A prominent sociologist known for his work on urban sociology, race, and class in the United States.

Racial Minorities

Groups of individuals classified differently from the majority population based on racial or ethnic characteristics, often facing systemic discrimination or marginalization.

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The action of coming to live permanently in a foreign country, often resulting in changes to personal identity, economic status, and social integration.