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Diane, Maria, Debbie, and Susan incorporate their psychiatry practice (“Babbling Lunatics, Inc.”) with the following investments
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PSYCHIATRY PRACTICE / TUTORIALOUTLET DOT COM Psychiatry practice FOR MORE CLASSES VISIT www.tutorialoutlet.com Diane, Maria, Debbie, and Susan incorporate their psychiatry practice (“Babbling Lunatics, Inc.”) with the following investments: Diane contributes her copyright (basis of $62,000 and FMV of $143,000) for 9500 shares of Lunatic stock, worth $93,500. The corporation also assumed her $59,500 of business debts. Maria contributes her real estate (basis of $465,000, FMV of $330,000) in exchange for 9100 shares of Lunatic stock, worth $425,000, and received $77,000 cash. Debbie contributes her patent (basis of $272,000, FMV of $475,000) for 7300 shares of Lunatic stock, worth $371,000. The corporation also assumed her $104,000 mortgage, which Debbie took in order to pay her past due gambling losses. Susan contributes accounting services to the corporation (basis of $0, FMV of $75,000) for 1,500 shares of Lunatic, Inc. stock, worth $75,000. Calculate the following: 1) Has the 80% control requirement been met? Why or why not? 2) Lunatics’ basis in the patent contributed by Debbie 3) Maria’s realized and recognized gains, if any.
