McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 52

{Research} Mickey, Mickayla, and Taylor are starting a new business (MMT).To get the business started, Mickey is contributing $200,000 for a 40% ownership interest, Mickalya is contributing a building with a value of $200,000 and a tax basis of $150,000 for a 40% ownership interest, and Taylor is contributing legal services for a 20% ownership interest.What amount of gain is each owner required to recognize under each of the following alterative situations? [Hint: Look at §351 and §721.
a.MMT is formed as a C corporation.b.MMT is formed as an S corporation.c.MMT is formed as an LLC.