In March of Year 2, Morton contributed the following two properties, which he acquired in February of Year 1, to Albany Corporation in exchange for additional Albany stock: (1) land having a $45,000 FMV and a $70,000 basis and (2) another property having an $82,000 FMV and a $74,000 adjusted basis. Albany' employees use the land as a parking lot until Albany sells it in March of Year 3 for $41,000. One month after the sale, in April of Year 3, Albany adopts a plan of liquidation. (Assume that the properties were contributed to Albany in a Sec. 351 transaction. Assume that the second property contributed by Morton was not land.) Read the requirements. (Enter all amounts, even losses, as a positive number.) Requirement a. What is Albany' adjusted basis in the land immediately after its contribution in March of Year 2? Albany' adjusted basis in the land immediately after its contribution in March of Year 2 is $ 53,000. Requirement b. What is Albany' recognized gain or loss on the subsequent land sale? Albany recognizes a $ 12,000 loss on the subsequent sale of land. Requirement c. How would your answer to Part b change if the land were not used in Albany' trade or business? $ 4,000 loss If the land were not used in Albany' trade of business, Albany recognizes a on the subsequent sale of land. Requirement d. How would your answer to Part c change if Morton contributed the land and other property in March of Year 1 instead of March of Year 2? $ 12,000 loss If Morton contributed the land and other property in Year 1 instead of Year 2, Albany recognizes a on the subsequent sale of land. Requirement d. How would your answer to Part c change if Morton contributed the land and other property in March of Year 1 instead of March of Year 2? $ 12,000 loss If Morton contributed the land and other property in Year 1 instead of Year 2, Albany recognizes a on the subsequent sale of land. Requirement e. How would your answer to Part c change if the corporation sold the land (contributed in March of Year 2) for $69,000 instead of $41,000? If the land were not used in Albany' trade of business, and the corporation sold the land (contributed in March of Year 2) for $69,000 instead of $41,000 Albany recognizes a $ 16,000 gain on the subsequent sale of land.
