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What will be the tax and nontax implications

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    Assignment ID: FG132480884

    However, at this point, David is undecided about what he will do. Emily receives 200 shares of Transformation stock in exchange for the transfer of the following sole proprietorship assets to the new corporation as follows:
    Adjusted                                      Basis                                 Fair                                Market Value
    Accounts receivable                $ 50,000                      400,000                        1,550,000
    Building                                 $2,000,000                       $                                -0-
    Proprietary information-app          100,000                     300,000                      $400,000
    Ethan will contribute $48 million of cash for 4,800 shares of Transformation stock.
    Question 1: What will be the tax and nontax implications relating to the formation of Transformation, Inc.

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