Lesson 3B-In Class Exercise-Liabilities 
Jim owns 80% of Gold Corp’s stock.  He transfers a business auto to Gold in exchange for additional Gold stock worth 5,000, its assumption of his 1,000 debt on the auto and his 2,000 education loan.  The automobile originally cost 12,000, has a 4,500 adjusted basis, and an 8,000 fmv on the transfer date.

a)	What are the amount and character of Jim’s recognized gain or loss?

b)	What is Jim’s basis for his additional Gold shares?

c)	When does Jim’s holding period for the additional shares start?

d)	What basis does Gold Corp take in the automobile?