oe and Sunny intend to enter into a business venture together and decided that an S corporation would be a desirable entity choice for federal income tax purposes. The corporation is named JS Inc....

oe and Sunny intend to enter into a business venture together and decided that an S corporation would be a desirable entity choice for federal income tax purposes. The corporation is named JS Inc. (“JS”). For newly established JS, Joe intends to contribute Property A with a fair market value (“FMV”) of $800 and basis of $300. Sunny intends to contribute cash of $800.

Now assume the fact that Joe contributes Property with a FMV of $800 and basis of $300, but subject to debt of $500.

54. Provide Joe’s basis in JS upon contribution.

55. Provide JS’s basis in Property A immediately after the contribution.

Now assume that Joe receives cash of $300 and stock for his contribution of Property A with a FMV of $800 and basis of $300, subject to no debt.

56. Provide Joe’s basis in JS upon contribution.

57. Provide JS’s basis in Property A immediately after the contribution.