In Order To Encourage The Development Of Its Industrial Park Union County Gives

In order to encourage the development of its industrial park, Union County gives Darter Corporation land (fair market value of $800,000) and cash of $500,000. Within one year, Darter constructs a new plant at the site at a cost of $1,200,000.a. How much income, if any, must Darter Corporation recognize as a result of these transfers? b. What basis will Darter Corporation have in the land? In the plant? 23Cardinal Corporation has a basis of $800,000 in the stock of Finch Corporation, a subsidiary in which it owns 90% of all classes of stock. Cardinal has maintained this ownership interest for more than four years. In the current year, Cardinal liquidates Finch Corporation and acquires assets worth $1,300,000 and with an adjusted basis to Finch of $750,000. At the time of liquidation, Finch had E & P of $400,000, and a short-term capital loss carryover of $25,000.a. What is the recognized gain or loss to Finch and to Cardinal as a result of Finch’s liquidation? b. What basis will Cardinal Corporation have in the assets acquired from Finch Corporation? c. What happens to Finch’s E & P and short-term capital loss carryover? 24Rita sells her 25% interest in the RSTU Partnership to Nancy for $90,000 cash. At the end of the year prior to the sale, Rita’s basis in RSTU was $60,000. The partnership allocates $12,000 of income to Rita for the portion of the year she was a partner. On the date of the sale, the partnership assets and the agreed fair market values were as follows. Basis FMV CashAccounts ReceivableLandTotal $ 80,000-0- 208,000$288,000 $ 80,00060,000 180,000$320,000 Determine the amount and character of any gain that Rita recognizes on the sale.

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