Homework Answers
As per Section 351 any loss will not be realized but if any boot is received along with the qualified stock then the stock and boot will be allocated on pro-rata basis on the basis of the different types of property transferred. Loss on one asset will not be allowed to set off from the gain of another.
| Basis | FMV |
Share and boot (pro-rata) |
Gain/(loss) | |
| Asset 1 | 40,000 | 30,000 | 39,024 | 9,024 |
| Asset 2 | 15,000 | 40,000 | 14,634 | (25,366) |
| Asset 3 | 27,000 | 10,000 | 26,341 | 16,341 |
Total stock and boot: 80,000 (20,000+60,000)
Total of basis: 82,000
Divide on pro rata basis:
Asset 1: 80,000*40,000/82,000= 39,024
Asset 2: 80,000*15,000/82000= 14,634
Asset 3: 80,000*27,000/82,000= 26,341
Add Answer to:
w 5. Section 351 Multiple Assets Transfer - Exercise Xercise Zhang transfers three assets to newly...
PROBLEM 1: Jerry transfers two assets to a corporation as part of a Sec. 351 exchange....
PROBLEM 1: Jerry transfers two assets to a corporation as part of a Sec. 351 exchange. The first asset has an adjusted basis of $70,000 and an FMV of $50,000. The second asset has an adjusted basis of $70,000 and an FMV of $150,000. The FMV of the stock received is $180,000, and he also receives $20,000 cash. The realized and recognized gain on the second asset is A) $80,000 realized; $20,000 recognized. B) $80,000 realized; $15,000 recognized. C) $20,000...
Taxation - Code 351 Problem: Transfer to corporation controlled by transferor Please help me figure out...
Taxation - Code 351 Problem: Transfer to corporation controlled by transferor Please help me figure out the tax effects to both the shareholder and corporation. (What's each shareholder's recognized gain or loss, basis in their shares and the company's basis in the assets). All assets and liabilities were given during the incorporation. Shareholder A gave $100,000 in cash for 20% ownership/shares. Shareholder B gave a book binding equipment FMV $110,000, basis 30,000 and received $10,000 in cash plus 20% ownership/shares....
14-19 please 14. For Section 351 transfers, immediately after the exchange a. requires simultaneous transfer, if...
14-19 please
14. For Section 351 transfers, immediately after the exchange a. requires simultaneous transfer, if two or more transferors b. allows transfers to occur up to two years apart c. allows transfers to occur up to three years apart d. means that transfers should occur as close together as possible e, none of the above 13. Section 351 transfers for property and services are acceptable as long as the property value is at least a. 5% of the value...
Brian incorporates his sole proprietorship as Fancy Corporation and transfers its assets to Fancy in exchange...
Brian incorporates his sole proprietorship as Fancy Corporation and transfers its assets to Fancy in exchange for all 100 shares of Fancy stock and five $12,000 interest-bearing notes. The stock has a(n) $120,000 FMV. The notes mature consecutively on the first five anniversaries of the incorporation date. The assets transferred are as follows: E: (Click the icon to view the asset information.) Read the requirements. Requirement a. What are the amounts and character of Brian's recognized gains or losses? Complete...
In each of the problems below please describe the tax consequences to the parties involved in...
In each of the problems below please describe the tax consequences to the parties involved in the transaction. The answer should include an analysis of whether Section 351 applies to the transaction (unless the problem already states that Section 351 applies) and the computations for any recognized gain, the tax basis of any stock received by the shareholders; the tax basis of any property received by the corporation and the holding period of the stock/property. 1. On January 1, 2019...
Ben and Jerry decide to incorporate their ice cream business. Allie would also like to be a shareholder in the bu...
Ben and Jerry decide to incorporate their ice cream business. Allie would also like to be a shareholder in the business. As such, Ben and Allie agree that immediately after the incorporation of the company and the issuance of stock, Ben will sell Allie half of his shares in the company. Ben contributes inventory (FMV $60,000, Basis $30,000), and accounts receivable (FMV $40,000, Basis $40,000) to the corporation for 50% of the stock, and Jerry contributes equipment (FMV $60,000, Basis...
Chapter 19 Corporate Organization Exercise Kathy and Carl formed a corporation by each contributi...
Please show your work
Chapter 19 Corporate Organization Exercise Kathy and Carl formed a corporation by each contributing an asset with a FMV of $50,000 for half of the stock in the corporation. Prior to the transfer, Kathy had an adjusted basis of $40,000 in her asset and Carl had an adjusted basis of $60,000 in his asset. a. Does this exchange qualify for 351 treatment? Why? b. What is Kathy's realized gain on the transaction? c. What is Kathy's...
5 Andi Corporation transfers assets with an adjusted basis of $200,000 and an FMV of 300,000...
5 Andi Corporation transfers assets with an adjusted basis of $200,000 and an FMV of 300,000 to Bella Corporation in exchange for $300,000 of Bella Corporation stock as part of a tax-free reorganization. The Bella stock had been purchased from its shareholders one year earlier for $250,000. How much gain do Andi and Bella Corporations recognize on the asset transfer? A) Andi S0 B) Andi $0 C) Andi $100,000 D) Andi s100,000 Page Ref: C: 7-14 and 7-15. (Slide 7-12)....
14-19 please
14. For Section 351 transfers, immediately after the exchange a. requires simultaneous transfer, if two or more transferors b. allows transfers to occur up to two years apart c. allows transfers to occur up to three years apart d. means that transfers should occur as close together as possible e, none of the above 13. Section 351 transfers for property and services are acceptable as long as the property value is at least a. 5% of the value...
Brian incorporates his sole proprietorship as Fancy Corporation and transfers its assets to Fancy in exchange for all 100 shares of Fancy stock and five $12,000 interest-bearing notes. The stock has a(n) $120,000 FMV. The notes mature consecutively on the first five anniversaries of the incorporation date. The assets transferred are as follows: E: (Click the icon to view the asset information.) Read the requirements. Requirement a. What are the amounts and character of Brian's recognized gains or losses? Complete...
In each of the problems below please describe the tax consequences to the parties involved in the transaction. The answer should include an analysis of whether Section 351 applies to the transaction (unless the problem already states that Section 351 applies) and the computations for any recognized gain, the tax basis of any stock received by the shareholders; the tax basis of any property received by the corporation and the holding period of the stock/property. 1. On January 1, 2019...
Ben and Jerry decide to incorporate their ice cream business. Allie would also like to be a shareholder in the business. As such, Ben and Allie agree that immediately after the incorporation of the company and the issuance of stock, Ben will sell Allie half of his shares in the company. Ben contributes inventory (FMV $60,000, Basis $30,000), and accounts receivable (FMV $40,000, Basis $40,000) to the corporation for 50% of the stock, and Jerry contributes equipment (FMV $60,000, Basis...
Please show your work
Chapter 19 Corporate Organization Exercise Kathy and Carl formed a corporation by each contributing an asset with a FMV of $50,000 for half of the stock in the corporation. Prior to the transfer, Kathy had an adjusted basis of $40,000 in her asset and Carl had an adjusted basis of $60,000 in his asset. a. Does this exchange qualify for 351 treatment? Why? b. What is Kathy's realized gain on the transaction? c. What is Kathy's...
5 Andi Corporation transfers assets with an adjusted basis of $200,000 and an FMV of 300,000 to Bella Corporation in exchange for $300,000 of Bella Corporation stock as part of a tax-free reorganization. The Bella stock had been purchased from its shareholders one year earlier for $250,000. How much gain do Andi and Bella Corporations recognize on the asset transfer? A) Andi S0 B) Andi $0 C) Andi $100,000 D) Andi s100,000 Page Ref: C: 7-14 and 7-15. (Slide 7-12)....
Most questions answered within 3 hours.
-
How many mL of 0.250 M BaCl2 would you need to precipitate all
the sulfate ion...
asked 11 minutes ago -
Calculate the activity of a pure 5.8-μg sample of 3215P
(T12=1.23×106s).
asked 20 minutes ago -
What personality theory and test might a psychologist use for a
small group of elders between...
asked 23 minutes ago -
When five capacitors with equal capacitances are connected in
series, the equivalent capacitance of the combination...
asked 27 minutes ago -
1.
A corporation manufactures two variants of the same product:
Deluxe (D) and Classic (C). The...
asked 30 minutes ago -
A survey of undergraduate students in the School of Business at
Northern University revealed the following...
asked 41 minutes ago -
If a random variable Xhas the gamma distribution with α= 2and β
= 1,
(a) What...
asked 41 minutes ago -
What are some of the main differences in emails sent to
1) a classmate and 2)...
asked 45 minutes ago -
Networks have a ‘dual' property’. They provide information that
allows us to estimate our location. But...
asked 52 minutes ago -
Using Mathematica programming -- I need the program to run 8
times and get 8 different...
asked 1 hour ago -
The survival to sexual maturity rates for genotypes A1A1, A1A2,
and A2A2 are 90%, 85%, &...
asked 54 minutes ago -
1-Imagine you're named an Economic Advisor to the
president of a very poor and backward country...
asked 59 minutes ago