Albert contributes to CarlCo, a newly formed corporation, property worth $80,000 with a basis of … 1 answer below »

 
   

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Albert contributes to CarlCo, a newly formed corporation, property worth $80,000 with a basis of $60,000 in exchange for 2,000 shares. Assume the stock is worth $1,000 per share. As part of the same transaction, Barry (an employee of Albert) contributes to CarlCo property worth $20,000 with a basis of $10,000 in exchange for 8,000 shares. How much income must Albert and Barry recognize? (Assume that if § 351 applies, Albert’s basis in the stock he receives is the same as his basis in the property.)