Exam 2: Corporate Formations and Capital Structure

Mario and Lupita form a corporation in a transaction coming under Sec.351.Lupita transfers property with an adjusted basis of $150,000 and an FMV of $200,000 in exchange for one-half of the stock.The property has an $80,000 mortgage,which the corporation assumes.The corporation's basis in the property is

Ralph and Yolanda purchased 20% of the initial offering of Major Corporation common stock for $150,000.Major Corporation is a qualifying small business corporation and the stock qualifies as Sec.1244 stock.Ten months later,Major Corporation files for bankruptcy and the shareholders are notified that the stock is worthless.Ralph and Yolanda,who are married and file a joint return,have a

Carmen and Marc form Apple Corporation.Carmen transfers land that is Sec.1231 property,with an adjusted basis of $18,000 and an FMV of $20,000 in exchange for one-half of the Apple Corporation stock.Marc transfers equipment that originally costs $28,000 on which he has taken $5,000 in depreciation deductions.The equipment has an FMV of $25,000 and he receives one-half of the stock and a $5,000 short-term note.The transaction meets the requirements of Sec.351.Which statement below is correct?