What is the amount of gain recognized by rosa, arvid

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Reference no: EM13127941

Rosa owns 30% of Pine Corporation's stock (basis of $50,000), and the other 70% was recently purchased by Arvid (basis of $620,000). Pine enters into a reorganization with Lodgepole Corporation, in which Rosa will receive a 5% interest (value of $300,000) in Lodgepole and Arvid will receive a 10% interest (value of $600,000) plus assets worth $100,000. Lodgepole's basis in these assets is $60,000. At the time of the reorganization, Pine's value is $1 million, and Lodgepole's value is $6 million.

a. What are Rosa's and Arvid's bases in their new Lodgepole stock?
b. What is the amount of gain (loss) recognized by Rosa, Arvid, Pine, and Lodgepole on the reorganization?

Reference no: EM13127941

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