Rafael transfers the following assets to Crane Corporation in exchange for all of its stock. Note: Assume that neither Rafael nor Crane plans to make any special tax elections at the time of incorporation.
Assets Rafael's Adjusted Basis Fair Market Value
Inventory $60,000 $100,000
Equipment 150,000 105,000
Shelving 80,000 65,000
Note: If an amount is zero, enter "0". Do not round any division.
a. Rafael's realized is $ . Of this amount, $ is recognized.
b. Assuming no election is made, Rafael's basis in the stock is $ .
c. Crane's basis is $ for inventory, $ for equipment, and $ for shelving.
d. If Rafael plans to hold his stock for a substantial period of time, he and Crane may elect to allow Crane a carryover basis in the assets received. Its basis in the assets would also change to $ for inventory, $ for equipment, and $ for shelving.