ACE Corporation

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Andy, Chuck and Emily contribute cash and property to form the ACE Corporation. A summary of their contributions is given below. Determine their ownership if ACE Corp stock, gain recognized on stock issuance (if any), and each shareholder’s adjusted basis in the stock.

                        FMV                     A/B            LOAN            NET FMV            RECEIVE
       Andy        75,000     cash       75,000            ———-             75,000                  75,000         Stock
       Chuck    100,000      equip        0                 25,000                 75,000                 75,000         Stock
       Emily     200,000       land     100,000            50,000               150,000               100,000         Stock
                    350,000                  175,000             125,000             225,000                50,000        Bond
                                                                                                                                                                      150,000