1 A shareholder contributes land and a building with fair ma

1. A shareholder contributes land and a building with fair market values of $ 273 and $ 533 respectively in return for common stock and $ 18 in cash. How much boot, if any, is allocated to the land?

Solution

Calculate amount allocated to Land :

Total = 273+533 = 806

Total amount = 273+533+18 = 824

Amount allocated to Land = 824*273/806 = $279