Abc Company Purchases All The Assets Of Johns Saw Shop

ABC Company purchases all the assets of John’s Saw Shop. Details on basis and fair market values of John’s Saw Shop’s assets are as follows:

ABC Company purchases all the assets of John’s Saw Shop.

a. What is ABC’s basis in the assets purchased if ABC pays $40,000 for them?
b. What is ABC’s basis in the assets purchased if ABC pays $70,000 for them?
c. What is ABC’s basis if John’s Saw Shop is a corporation and ABC purchases all John’s stock for$60,000?

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