Suppose SPA Corp.was formed by Sara Inc.(a C corporation that is 100 percent owned by Sara)and Sara's friend Tyson.In exchange for 50 percent of the stock of SPA, Sara contributed $100,000.In exchange for the remaining 50 percent of the SPA stock, Tyson contributed a building with a fair market value of $100,000 and an adjusted tax basis of $60,000.How much gain is Tyson required to recognize on the contribution? Is SPA eligible to elect S corporation status?

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The Answer of Suppose SPA Corp.was formed by Sara Inc.(a C corporation that is 100 percent owned by Sara)and Sara's friend Tyson.In exchange for 50 percent of the stock of SPA, Sara contributed $100,000.In exchange for the remaining 50 percent of the SPA stock, Tyson contributed a building with a fair market value of $100,000 and an adjusted tax basis of $60,000.How much gain is Tyson required to recognize on the contribution? Is SPA eligible to elect S corporation status?