Homework Answers
Ans is D that is Neither Gabriella nor Juanita recognizes gain as a result of these transfers. Reason is both have shared same amount of tangible or intangible assets.
So correct ans is option D
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Gabriella and Juanita form Luster Corporation. Gabriella transfers cash of $50,000 for 50 shares of stock,...
Three individuals form Skylark Corporation with the following contributions: Cliff, cash of $50,000 for 50 shares:...
Three individuals form Skylark Corporation with the following contributions: Cliff, cash of $50,000 for 50 shares: Brad Land worth $20,000 (basis of $11,000) for 20 shares; and Ron, cattle worth $9,000 (basis of $6,000) for 9 shares and services worth $21,000 for 21 shares a. Brad's basis in his stock is $20,000. b. Ron's basis in his stock is $27,000. c. These transfers are fully taxable and not subject to $ 351. d. Ron's basis in this stock is $6,000....
Joe and Kay form Gull Corporation. Joe transfers cash of $250,000 for 200 shares in Gull...
Joe and Kay form Gull Corporation. Joe transfers cash of $250,000 for 200 shares in Gull Corporation. Kay transfers property with a basis of 550,000 and fair market value of $240,000. She agrees to accept 200 shares in Gull Corporation for the property and for providing bookkeeping services to the corporation in its first year of operation. The value of Kay's services is $10,000. With respect to the transfer: a. Guil Corporation has a basis of $240,000 in the property...
Three individuals form ABC Corporation with the following contributions: Cliff, cash of $50,000 for 50 shares;...
Three individuals form ABC Corporation with the following contributions: Cliff, cash of $50,000 for 50 shares; Brad, land worth $20,000 (basis of $11,000) for 20 shares; and Ron, cattle worth $9,000 (basis of $6,000) for 9 shares and services worth $21,000 for 21 shares. Which of the following statements is correct? A. These transfers are fully taxable and not subject to § 351. B. Ron’s basis in his stock is $27,000. C. Ron’s basis in his stock is $6,000. D....
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...
Rachel owns 100% of the stock of Cardinal Corporation. In the current year Rachel transfers an...
Rachel owns 100% of the stock of Cardinal Corporation. In the current year Rachel transfers an installment obligation, tax basis of $180,000 and fair market value of $350,000, for additional stock in Cardinal worth $350,000. a. Rachel has a taxable gain of $170,000. b. Rachel recognizes no gain on the transfer. c. Rachel has a taxable gain of $180,000 d. Rachel has a basis of $350,000 in the additional stock she received in Cardinal Corporation Os. None of these choices...
Earl and Mary form Crow Corporation. Earl transfers property, basis of $200,000 and value of $1,500,000...
Earl and Mary form Crow Corporation. Earl transfers property, basis of $200,000 and value of $1,500,000 for 50 shares in Crow Corporation Mary transfers property, basis of $80,000 and value of 51,480,000, 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. Crow will have a business deduction of $120,000 for the value of the services Mary will...
To carry out a qualifying stock redemption, Turaco Corporation (E & P of $800,000) transfers land...
To carry out a qualifying stock redemption, Turaco Corporation (E & P of $800,000) transfers land held for investment purposes to Aida, a shareholder. The land had a basis of $250,000, a fair market value of $400,000, and is subject to a $300,000 liability. Aida has a basis of $70,000 in the shares redeemed. Which of the following is a correct statement regarding the tax consequences of this redemption? a. Aida will have $400,000 of dividend income. b. Aida will...
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...
Patel and Pierce form PP Corporation by making the following transfers: Adjusted Basis Fair Market Value...
Patel and Pierce form PP Corporation by making the following transfers: Adjusted Basis Fair Market Value From Patel, Cash $360,000 $360,000 -O- Patent 40,000 From Pierce- Equipment (depreciation claimed $100,000) 240,000 370,000 Both Patel and Pierce receive stock in PP Corporation equal to the value of their investments. o Neither Patel nor Pierce recognize income. O Patel must recognize income of $40,000. O Pierce must recognize income of $130,000 and Patel has no income. O Pierce must recognize income of...
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?...
Three individuals form Skylark Corporation with the following contributions: Cliff, cash of $50,000 for 50 shares: Brad Land worth $20,000 (basis of $11,000) for 20 shares; and Ron, cattle worth $9,000 (basis of $6,000) for 9 shares and services worth $21,000 for 21 shares a. Brad's basis in his stock is $20,000. b. Ron's basis in his stock is $27,000. c. These transfers are fully taxable and not subject to $ 351. d. Ron's basis in this stock is $6,000....
Joe and Kay form Gull Corporation. Joe transfers cash of $250,000 for 200 shares in Gull Corporation. Kay transfers property with a basis of 550,000 and fair market value of $240,000. She agrees to accept 200 shares in Gull Corporation for the property and for providing bookkeeping services to the corporation in its first year of operation. The value of Kay's services is $10,000. With respect to the transfer: a. Guil Corporation has a basis of $240,000 in the property...
Rachel owns 100% of the stock of Cardinal Corporation. In the current year Rachel transfers an installment obligation, tax basis of $180,000 and fair market value of $350,000, for additional stock in Cardinal worth $350,000. a. Rachel has a taxable gain of $170,000. b. Rachel recognizes no gain on the transfer. c. Rachel has a taxable gain of $180,000 d. Rachel has a basis of $350,000 in the additional stock she received in Cardinal Corporation Os. None of these choices...
Earl and Mary form Crow Corporation. Earl transfers property, basis of $200,000 and value of $1,500,000 for 50 shares in Crow Corporation Mary transfers property, basis of $80,000 and value of 51,480,000, 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. Crow will have a business deduction of $120,000 for the value of the services Mary will...
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...
Patel and Pierce form PP Corporation by making the following transfers: Adjusted Basis Fair Market Value From Patel, Cash $360,000 $360,000 -O- Patent 40,000 From Pierce- Equipment (depreciation claimed $100,000) 240,000 370,000 Both Patel and Pierce receive stock in PP Corporation equal to the value of their investments. o Neither Patel nor Pierce recognize income. O Patel must recognize income of $40,000. O Pierce must recognize income of $130,000 and Patel has no income. O Pierce must recognize income of...
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