Problem 4-33 (LO. 1,3) Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis...

Question

Question

Problem 4-33 (LO. 1,3) Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150,000) for 70 s

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

a.

Bob shall recognize the gain of $ 15,000. This is value of services Bob rendered to corporation. Bob shall not recognize transfer of property to corporation as no consideration received. Ann shall not recognize gain.

Ann recognizes (ordinary income or gain) of NIL Bob recognizes (ordinary income or gain) of $ 15,000

b.

Ann has basis of $ 150,000 in stock in Robin corporation.

Bob has basis of $ 30,000 i.e. basis in property transferred + gain recognized of $ 15,000 totaling to $ 45,000.

Ann has a basis of 150,000, while Bob has a basis of 45,000 in the stock.

c.

Ann has transferred property worth $ 150,000 to Robin corporation and Bob $ 30,000.

Hence, Robin corporation has total basis of $ 180,000 in property transferred. The corporation shall capitalize $ 15,000, totaling the basis to $ 195,000.

Robin Corporation has a basis of 150,000 in the property Ann transferred and a basis of 30,000 in the property Bob transferred.

Add a comment

Answer 2

Similar Homework Help Questions

Problem 4-33 (LO. 1, 3) Ann and Bob form Robin Corporation. Ann transfers property worth $420,000...

Problem 4-33 (LO. 1, 3) Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150.000) for 20 shares in Robin Corporation. Bob receives 30 shares for property worth $15,000 (basis of $3,000) and for legal services (worth $165,000) in organizing the corporation. a. What gain or income, if any, will the parties recognize on the transfer? Ann recognizes pain of 1 5,000 X and Bob recognizes again compensation income of 165,000 of 15,000 X and has...
Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150,000) for 70...

Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150,000) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $15,000 (basis of $3,000) and for legal services (worth $165,000) in organizing the corporation. What gain or income, if any, will the parties recognize on the transfer? Ann recognizes a gain of $______ and Bob recognizes a gain of $_____ and compensation income of $______. What basis do Ann and Bob have in...
Problem 18-31 (Algorithmic) (LO. 1, 3) Ann and Bob form Robin Corporation. Ann transfers property worth...

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...

1- nn and Bob form Robin Corporation. Ann transfers property worth $352,500 (basis of $123,375) for...

1- nn and Bob form Robin Corporation. Ann transfers property worth $352,500 (basis of $123,375) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $141,000 (basis of $28,200) and for legal services (worth $14,100) in organizing the corporation. 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...
Erica transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for...

Erica transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for all of Robin's stock, worth $300,000, and a 10-year note. The note was executed by Robin and made payable to Erica in the amount of $200,000. As a result of the transfer: a. Erica recognizes gain of $400,000. b. Robin Corporation has a basis of $100,000 in the land. c. Robin Corporation has a basis of $300,000 in the land. d. Erica does not...
Kevin transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for...

Kevin transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for all of Robin’s stock, worth $300,000, and a 10-year note. The note was executed by Robin Corp. and made payable to Kevin in the amount of $200,000. Because of the transfer: a. Kevin does not recognize gain. b. Kevin recognizes gain of $400,000. c. Robin Corporation has a basis of $100,000 in the land. d. Robin Corporation has a basis of $300,000 in the...

Wayne and Paul form ABC Corporation with the following investments. Wayne transfers machinery (basis of $40,000...

Wayne and Paul form ABC Corporation with the following investments. Wayne transfers machinery (basis of $40,000 and fair market value of $100,000), while Paul transfers land (basis of $20,000 and fair market value of $90,000) and services rendered (worth $10,000) in organizing the corporation. Each is issued 25 shares in ABC Corporation. With respect to the transfers: A. Wayne has no recognized gain; Paul recognizes income/gain of $80,000. B. Neither Wayne nor Paul has recognized gain or income on the...
Earl and Mary form Crow Corporation. Earl transfers property, basis of $200,000 and value of $1,600,000...

Earl and Mary form Crow Corporation. Earl transfers property, basis of $200,000 and value of $1,600,000 for 30 shares in Crow Corporation. Mary transfers property, basis of $80,000 and value of $1,480,000, and agrees to serve as manager of Crow for one year, in return Mary receives 50 shares of Crow. The value of Mary's services is $120,000. With respect to the transfers: a. Mary will not recognize gain or income, X b. Earl will recognize a gain of $1,400,000...
Bruce Banner and Natasha Romanoff form Sakaar Corporation with the following investments. Bruce transfers equipment (basis...

Bruce Banner and Natasha Romanoff form Sakaar Corporation with the following investments. Bruce transfers equipment (basis of $60,000 and fair market value of $150,000), while Natasha transfers land (basis of $25,000 and fair market value of $120,000) and services rendered (worth $30,000) in organizing the corporation. Each is issued 25 shares in Sakaar Corporation. What amount of gain or loss will Bruce realize and recognize on the transaction and what is his basis in the stock received? What are the...

4. Bruce Banner and Natasha Romanoff form Sakaar Corporation with the following investments. Bruce transfers equipment...

4. Bruce Banner and Natasha Romanoff form Sakaar Corporation with the following investments. Bruce transfers equipment (basis of $60,000 and fair market value of $150,000), while Natasha transfers land (basis of $25,000 and fair market value of $120,000) and services rendered (worth $30,000) in organizing the corporation. Each is issued 25 shares in Sakaar Corporation. (12 points) What amount of gain or loss will Bruce realize and recognize on the transaction and what is his basis in the stock received?...

Problem 4-33 (LO. 1,3) Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis...

Homework Answers

Add Answer to:
Problem 4-33 (LO. 1,3) Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis...

Post as a guest

Earn Coins