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Tax Consequences of a Type B Reorganization. Trent Corporation
Solution
a)
b)
c)
Adams basis for 2000 stock $425000 is the basis,
d)
There is no change in "a"
b)
c) Same , no change,
Adams basis for 2000 stock $425000 is the basis,
Juan Miguel
Existing Co
Share value total 125000 300000
no of Shares 1000 1000
Price of Share 125 300
Exchange Co:
excchange shares 2500 2500
FMV 100 100
Total value 250000 250000
Gain/Loss 125000 -50000
Tax Consequences of a Type B Reorganization- Trent CorporationSolution.docx

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Tax Consequences of a Type B Reorganization- Trent CorporationSolution.docx

  • 1. Tax Consequences of a Type B Reorganization. Trent Corporation Solution a) b) c) Adams basis for 2000 stock $425000 is the basis, d) There is no change in "a" b) c) Same , no change, Adams basis for 2000 stock $425000 is the basis, Juan Miguel Existing Co Share value total 125000 300000 no of Shares 1000 1000 Price of Share 125 300 Exchange Co: excchange shares 2500 2500 FMV 100 100 Total value 250000 250000 Gain/Loss 125000 -50000