Answer:
Step-by-step explanation:
To calculate Clark's basis in Jet stock, we need to determine the total value of the stock he received in exchange for his cash and property contributions.
First, we can calculate the total fair market value of Jet Corp.'s authorized common stock as:
$400,000
Next, we can calculate the total fair market value of the property contributed by both Clark and Hunt as:
Clark's contribution: $100,000 fair market value
Hunt's contribution: $240,000 fair market value
Total: $340,000 fair market value
We can then determine the percentage of Jet stock that Clark received by dividing the fair market value of his contribution by the total fair market value of all contributions:
Clark's contribution: $100,000 fair market value / $340,000 total fair market value = 29.41%
Therefore, Clark received 29.41% of Jet Corp.'s authorized common stock.
To determine Clark's basis in his Jet stock, we need to allocate his total contribution (cash plus property) between the two assets he received (cash and Jet stock) based on their relative fair market values.
Clark's cash contribution was $60,000, and the fair market value of his Jet stock is $100,000. Therefore, his total contribution was $160,000 ($60,000 cash + $100,000 stock).
To calculate Clark's basis in his Jet stock, we can multiply his total contribution by the percentage of Jet stock he received:
$160,000 total contribution x 29.41% Jet stock = $47,059.
Therefore, Clark's basis in his Jet stock is $47,059.