Noreen transfers to Spindle Corporation depreciable machinery originally costing $17,000 and now having a $12,000 adjusted basis.
Noreen transfers to Spindle Corporation depreciable machinery originally costing $17,000 and now having a $12,000 adjusted basis. In exchange, Noreen receives all 350 shares of Spindle stock having an $19,000 FMV and a three-year Spindle note having a $6,000 FMV.
Requirements
| a. | What are the amount and character of Noreen’s recognized gain or loss? |
| b. | What are Noreen’s bases in the Spindle stock and note? |
| c. | What is Spindle’s basis in the machinery? |
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