Homework Answers
Solution to 3
The correct answer is option (B).
- This is wrong because it must be held for not less than 5 Years not 2 years
- This is correct because as per the latest amendment to Section 1202, 100% exclusion of gain is provided.
- Incorrect. Because it has to be domestic but other than a hotel, restaurant, financial institution, real estate company, farm, mining company, or business relating to law, engineering, or architecture
- Incorrect, Must be issued for Money or property but not services.
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explain pls
3. Which of the following is true of Section 1202 qualified small business stock...
Tax Drill - Qualified Small Business Stock Complete the following statements regarding qualified small business stock....
Tax Drill - Qualified Small Business Stock Complete the following statements regarding qualified small business stock. Enter percents as whole numbers. The holder of qualified small business stock acquired after September 27, 2010 may exclude_________ % of any gain from the sale or exchange of such stock. _________ shareholders qualify for the exclusion. To qualify for the exclusion, the taxpayer must have held the stock for more than ______ years and must have acquired the stock as part of ________...
explain please! 4. Campos sold equipment for $200,000. The equipment was purchased for $160,000 and had...
explain please!
4. Campos sold equipment for $200,000. The equipment was purchased for $160,000 and had accumulated depreciation of $60,000. What amount is reported as Section 1231 gain? c. $60,000 b. $40,000 e. $200,000 d. $100,000 a. $0 5. On January 1, Year 2, Shah acquired an office building, economic useful life of 40 years, for $780,000 for use in his business. There was no estimated salvage value. Shah depreciated the building under MACRS for 10 years for a total...
explain pls! _6. Gary sold business equipment in the current year for a $50,000 net gain...
explain pls!
_6. Gary sold business equipment in the current year for a $50,000 net gain (after taking into account any depreciation recapture). The equipment was originally purchased two years ago and was classified as a Section 1231 asset. This was the only asset sale for the year. Five years ago, Gary had a $60,000 net Section 1231 loss but he has not had any Section 1231 transactions since then. For the current year, Gary's net Section 1231 gain is...
Antoine sold the following stock in 2018. ABC, Inc., is a § 1202 qualified small business...
Antoine sold the following stock in 2018. ABC, Inc., is a § 1202 qualified small business (QSB). Asset Cost Acquired Sale Price Sale Date ABC, Inc. 160 shares $ 116,800 1/10/10 $ 149,760 4/30/18 DEF, Inc. 128 shares 23,040 11/15/14 17,280 2/28/18 GHI, Inc. 64 shares 22,912 3/31/17 20,608 8/30/18 Complete the chart. After netting, what is the total gain or loss? If Antoine is in the 37% tax rate bracket, at what rate is the net gain or loss...
Molly purchased 200 shares of Able Corporation qualified small business stock for $100,000 on January 1,...
Molly purchased 200 shares of Able Corporation qualified small business stock for $100,000 on January 1, Year 1. On April 1, Year 3, Molly sold the 200 shares of Able stock for $300,000. Molly then purchased 100 shares of another qualified small business stock on May 1, Year 3, for $500,000. What amount of gain must Molly recognize in Year 3? A. $0 B. $100,000 C. $200,000 D. $400,000
Question 2 3.03 points Save Answer Identify which of the following statements is true. A corporation...
Question 2 3.03 points Save Answer Identify which of the following statements is true. A corporation must recognize a loss when transferring noncash boot property that has declined in value and its stock to a transferor as part of a Sec. 351 exchange Section 351 provides for nonrecognition of gain for the transferee corporation when it distributes appreciated and that is boot property to a shareholder The transferee corporation's holding period for assets acquired in an exchange meeting the Sec....
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...
Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet...
Pace Corporation acquired 100 percent of Spin Company's common stock on January 1, 20X9. Balance sheet data for the two companies immediately following the acquisition follows: Item Pace Corporation Spin Company Cash $ 30,000 $ 25,000 Accounts Receivable 80,000 40,000 Inventory 150,000 55,000 Land 65,000 40,000 Buildings and Equipment 260,000 160,000 Less: Accumulated Depreciation (120,000 ) (50,000 ) Investment in Spin Company Stock 150,000 Total Assets $ 615,000 $ 270,000 Accounts Payable $45,000 $33,000 Taxes Payable 20,000 8,000 Bonds Payable...
26. Identify which of the following statements is true. A) A liquidating distribution of property other...
26. Identify which of the following statements is true. A) A liquidating distribution of property other than a disqualified property that is made ratably to all shareholders (based on their stockholdings) will permit the recognition of loss on the portion of the distribution that is made to a related person. B) A subsidiary corporation can recognize losses on distributions to either the parent corporation or minority shareholders in a Sec. 332 liquidation. C) Section 336 prevents recognition of a loss...
Tom and Gail form Owl Corporation with the following consideration: Consideration Transferred Basis to Transferor Fair...
Tom and Gail form Owl Corporation with the following consideration: Consideration Transferred Basis to Transferor Fair Market Value Number of Shares Issued From Tom— Cash $50,000 $50,000 Installment note 240,000 350,000 40 From Gail— Inventory 60,000 50,000 Equipment 125,000 250,000 Patentable invention 15,000 300,000 60 The installment note has a face amount of $350,000 and was acquired last year from the sale of land held for investment purposes (adjusted basis of $240,000). Regarding these transactions, provide the following information: If...
explain please!
4. Campos sold equipment for $200,000. The equipment was purchased for $160,000 and had accumulated depreciation of $60,000. What amount is reported as Section 1231 gain? c. $60,000 b. $40,000 e. $200,000 d. $100,000 a. $0 5. On January 1, Year 2, Shah acquired an office building, economic useful life of 40 years, for $780,000 for use in his business. There was no estimated salvage value. Shah depreciated the building under MACRS for 10 years for a total...
explain pls!
_6. Gary sold business equipment in the current year for a $50,000 net gain (after taking into account any depreciation recapture). The equipment was originally purchased two years ago and was classified as a Section 1231 asset. This was the only asset sale for the year. Five years ago, Gary had a $60,000 net Section 1231 loss but he has not had any Section 1231 transactions since then. For the current year, Gary's net Section 1231 gain is...
Question 2 3.03 points Save Answer Identify which of the following statements is true. A corporation must recognize a loss when transferring noncash boot property that has declined in value and its stock to a transferor as part of a Sec. 351 exchange Section 351 provides for nonrecognition of gain for the transferee corporation when it distributes appreciated and that is boot property to a shareholder The transferee corporation's holding period for assets acquired in an exchange meeting the Sec....
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...
26. Identify which of the following statements is true. A) A liquidating distribution of property other than a disqualified property that is made ratably to all shareholders (based on their stockholdings) will permit the recognition of loss on the portion of the distribution that is made to a related person. B) A subsidiary corporation can recognize losses on distributions to either the parent corporation or minority shareholders in a Sec. 332 liquidation. C) Section 336 prevents recognition of a loss...
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