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Asset Description Adjusted Basis Fair Market Value
Depreciable property $27,457 $71,880
Inventory -0- 60,490
Fertilizer & lime -0- 680
Hay, straw, & oats -0- 3,670
Market livestock -0- 3,750
Cattle feed -0- 450
Gas & diesel -0- 700
Miscellaneous tools -0- 1,500
Cash 3,060 3,060
Improvements to Craig
Seggerman’s house -0- 700
Accounts receivable -0- 720
Deficiency payments -0- 6,980
Deposits -0- 1,760
Total 30,517 156,340
Either the property that was transferred was subject to
liabilities or Seggerman Farms assumed the liabilities from
Michael Seggerman in the amount of $113,111 as follows:
Amount of
Creditor Liability
Minonk State Bank $89,555
Ford Motor Co. 5,766
Ray Seggerman 17,790
Total 113,111
The amount of the liabilities that were transferred to Seggerman
Farms by Michael Seggerman exceeded the adjusted basis of the
assets that he transferred to Seggerman Farms by $82,594. The
portion of this gain that was attributable to long-term capital
gain was $42,827, and the portion attributable to ordinary gain
was $39,767.
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Last modified: May 25, 2011