Question

Problem 18-31 (Algorithmic) (LO. 1, 3) Ann and Bob form Robin Corporation. Ann transfers property worth $322,500 (basis of $112,875) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $129,000 (basis of $25,800) and for legal services (worth $12,900) in organizing the corporation. If there is no gain or loss, enter "0" for the amount. a. What gain or income, if any, will the parties recognize on the transfer? Ann recognizes of $ Bob recognizes of $ b. What basis do Ann and Bob have in the Robin Corporation stock? Ann has a basis of $ and Bob has a basis of $ in the stock. c. What is Robin Corporation's basis in the property and services it received from Ann and Bob? Robin Corporation has a basis of $ in the property Ann transferred and a basis of $ in the property Bob transferred.

Answer 1

Solution: - @ Ann does not recognize gain Bob recognizes a gain of $12,900 the value of services Bob aen dered to the coaporation. Bob does not recognize gelin on the transfer of property to the corporation because no boot geceived @ Am has o basis of $1,12,8757 the stock of Robben (osporation. Bob hase a basis af $38,700 an his stocks in Robin corporation = { $25,800 (on paopes ty transfor) +$12,900(gan apcognized ) = $38,700 © Robin corporation has a basis of $1,12,875 in the propeaty of Anni transfeared and a basis of $25,800 in property Bob trans fexed Robin Coipouation capitakze . 119.900/a Ozganization cont