James and Dolley form Madison Corporation. James transfers l…
James and Dolley form Madison Corporation. James transfers land ($25,000FMV, $18,000A/B) in exchange for 50% of the Madison Corporation stock. Dolley transfers equipment that originally cost $32,000 on which she has taken $8,000 in depreciation. The equipment has a FMV of $33,000. Dolley receives 50% of the stock of Madison Corporation and a $8,000 note receivable. The transaction qualifies for deferral under §351. Which statement below is correct?
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