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Michael Contributes Equipment with a $25,000 Adjusted Basis and a $40,000

Question 53

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Michael contributes equipment with a $25,000 adjusted basis and a $40,000 FMV to Miller Corporation for 25 of its 50 shares of stock. His son, Michael Jr., contributes $10,000 cash for the remaining 25 Miller shares. What tax issues should Michael and his son consider with respect to the stock acquisitions?

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• Does the property transfer meet the Se...

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