Answer Happy

In the current year, Mitch, Hank, and Cyn form Hades Corporation. Mitch contributes land (a capital asset) having a $100,000 EMV in exchange for 130 shares of Hades stock. He purchased the land three years ago for $140,000. Hank contributes machinery (Sec. 1231 property purchased four years ago) having a $100,000 adjusted basis and a $60,000 FMV in exchange for 90 shares of Hades stock. Cyn contributes services worth $40,000 in exchange for 40 shares of Hades stock. Requirement a. What is the amount of Mitch's recognized gain or loss? Mitch realizes a $ gain and recognizes no gain or loss. Requirement b. What is Mitch's basis in his Hades shares? When does his holding period begin? Mitch's basis in the Hades shares is $ and his holding period for the stock when Mitch originally Requirement c. What is the amount of Hank's recognized gain or loss? Hank realizes a $ ][ and recognizes Requirement What is Hank's basis Hank's basis in the Hades shares is $ when Hank originally Requirement e. How much income, if any, does Cyn recognize? Cyn realizes a s and recognizes his Hades shares? When does his holding period begin? deemed begin and his holding period for the stock deemed to begin of $ Requirement f. What is Cyn's basis in her Hades shares? When does her holding period begin? Cyn's basis in the Hades shares is and her holding period begins the day $ Requirement g. What is Hades's basis in the land and the machinery? When does its holding period begin? How does Hades treat the amount paid to Cyn for her services? Let's begin by determining the basis in the land and when the holding period would begin. Hades's basis in the land is $ and Hades's holding period begins the day 1 Determine the basis in the machinery and when the holding period would begin. Hades's basis in the machinery is $ and Hades's holding period begins the day Determine how Hades will treat the amount paid to Cyn for her services. Hades's basis in the services would be $ and the holding period would start