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In: Accounting

In March of Year 2, Manny contributed the following two properties, which he acquired in February...

In March of Year 2, Manny contributed the following two properties, which he acquired in February of Year 1, to Illinois Corporation in exchange for additional

Illinois stock: (1) land having a $54,000 FMV and a $78,000 basis and (2) another property having an $89,000 FMV and a $74,000 adjusted basis.Illinois' employees use the land as a parking lot until Illinois sells it in March of Year 3 for $52,000. One month after the sale, in April of Year 3,Illinoisadopts a plan of liquidation. (Assume that the second property contributed by Mannywas not land.)

a.

 What is Illinois' adjusted basis in the land immediately after its contribution in March of Year 2

b.

 What is Illinois' recognized gain or loss on the subsequent land sale

c.

 How would your answer to Part b change if the land were not used in Illinois'
trade or business

d.

 How would your answer to Part c change Manny contributed the land and other property in March of Year 1 instead of March of Year 2

e.

 How would your answer to Part c change if the corporation sold the land (contributed in March of Year 2) for $76,000 instead of $52,000

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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