Homework Answers
Your answer regarding IS and IS NOT Is correct
Below is the answer for income and basis computation -
| income = | =(43500+23100)-(29000+15400) | 48300 | |||
| Basis = | =(29000-7250)+15400 | 37150 | |||
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Exercise 18-21 (Algorithmic) (LO. 2) Jocelyn contributes land with a basis of $29,000 and fair market...
Jocelyn contributes land with a basis of $36,500 and fair market value of $54,750 and inventory...
Jocelyn contributes land with a basis of $36,500 and fair market value of $54,750 and inventory with a basis of $11,200 and fair market value of $16,800 in exchange for 100% of Zion Corporation stock. The land is subject to a $9,125 mortgage. Determine Jocelyn's recognized gain or loss and the basis in the Zion stock received. The exchange (Is or Is not) tax-free under § 351 because the release of a liability (is or is not) treated as boot...
Jocelyn contributes land with a basis of $32,000 and fair market value of $48,000 and inventory...
Jocelyn contributes land with a basis of $32,000 and fair market value of $48,000 and inventory with a basis of $14,200 and fair market value of $21,300 in exchange for 100% of Zion Corporation stock. The land is subject to a $8,000 mortgage. Determine Jocelyn's recognized gain or loss and the basis in the Zion stock received. If an amount is zero, enter "0". The exchange_____ tax-free under § 351 because the release of a liability______ treated as boot under...
Exercise 18-19 (Algorithmic) (LO. 1) Marie and Ethan form Roundtree Corporation with the transfer of the...
Exercise 18-19 (Algorithmic) (LO. 1) Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $92,400 in exchange for 400 shares of stock. Ethan contributes an installment note receivable (basis $25,000; fair market value $30,000), land (basis $50,000; fair market value $170,000), and inventory (basis $135,680; fair market value $169,600) in exchange for 1,600 shares. Determine Marie and Ethan's current income, gain, or loss and...
Discussion Question 4-11 (LO. 3) With respect to the calculation of the basis of stock received...
Discussion Question 4-11 (LO. 3) With respect to the calculation of the basis of stock received by a shareholder in a $ 351 transfer, label each of the following as being either "True" or "False" a. If a shareholder transfers a liability to the corporation along with property, the basis in the stock received is reduced by the amount of the liability transferred to the corporation. b. Section 362(e)(2) generally requires the corporation to step down the carryover basis for...
3. Venom owns land with an adjusted basis of $280,000 and a fair market value of...
3. Venom owns land with an adjusted basis of $280,000 and a fair market value of $150,000. He sells the land for $115,000 to Phenom, Inc., a corporation in which he owns 60% of the stock. Determine the amount of realized and recognized gain or loss to Venom and the adjusted basis for Phenom. (5 points) 4. In 2018, Riot purchased 200 shares of Misanthropy Corporation stock for $24,000 on January 1, 2015. He sells 50 shares of the 200...
Exercise 21-22 (Algorithmic) (LO. 10) On June 1 of the current tax year, Elisha and Ezra...
Exercise 21-22 (Algorithmic) (LO. 10) On June 1 of the current tax year, Elisha and Ezra (who are equal partners) contribute property to form the Double E Partnership. Elisha contributes cash of $348,480. Erra contributes a building and land with an adjusted basis and fair market value of $580,800, subject to a liability of $232,320. The partnership borrows $36,300 to finance construction of a parking lot in front of the building. At the end of the first year (December 31),...
An individual contributes two properties to a corporation in a 351 exchange. The first property has...
An individual contributes two properties to a corporation in a 351 exchange. The first property has a basis of $50000, and fair market value of $70000. The second property has a basis of $80000, and fair market value of $85000. The second property is subject to a mortgage of $40000. The individual's stock basis after the transfer is: A.130000 B. 120000 C. 155000 D. 90000
Amy transfers property with a tax basis of $1,155 and a fair market value of $1,020...
Amy transfers property with a tax basis of $1,155 and a fair market value of $1,020 to a corporation in exchange for stock with a fair market value of $895 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $125 on the property transferred. What is Amy's tax basis in the stock received in the exchange? Multiple Choice $1,155 $1,030 $930 $895
Rachelle transfers property with a tax basis of $825 and a fair market value of $1,300...
Rachelle transfers property with a tax basis of $825 and a fair market value of $1,300 to a corporation in exchange for stock with a fair market value of $700 and $214 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $386 on the property transferred. What is the corporation's tax basis in the property received in the exchange? Multiple Choice $1,300 $1,039 $825 $700
Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which...
Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporating Broadbill, Allie borrows $100,000 for personal reasons and gives the lender a second mortgage on the land. Broadbill Corporation issues stock worth $300,000 to Allie and assumes the mortgages on the land. If an amount is zero, enter "0". a. What are the tax consequences to Allie and to Broadbill Corporation? Since...
Exercise 18-19 (Algorithmic) (LO. 1) Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $92,400 in exchange for 400 shares of stock. Ethan contributes an installment note receivable (basis $25,000; fair market value $30,000), land (basis $50,000; fair market value $170,000), and inventory (basis $135,680; fair market value $169,600) in exchange for 1,600 shares. Determine Marie and Ethan's current income, gain, or loss and...
Discussion Question 4-11 (LO. 3) With respect to the calculation of the basis of stock received by a shareholder in a $ 351 transfer, label each of the following as being either "True" or "False" a. If a shareholder transfers a liability to the corporation along with property, the basis in the stock received is reduced by the amount of the liability transferred to the corporation. b. Section 362(e)(2) generally requires the corporation to step down the carryover basis for...
3. Venom owns land with an adjusted basis of $280,000 and a fair market value of $150,000. He sells the land for $115,000 to Phenom, Inc., a corporation in which he owns 60% of the stock. Determine the amount of realized and recognized gain or loss to Venom and the adjusted basis for Phenom. (5 points) 4. In 2018, Riot purchased 200 shares of Misanthropy Corporation stock for $24,000 on January 1, 2015. He sells 50 shares of the 200...
Exercise 21-22 (Algorithmic) (LO. 10) On June 1 of the current tax year, Elisha and Ezra (who are equal partners) contribute property to form the Double E Partnership. Elisha contributes cash of $348,480. Erra contributes a building and land with an adjusted basis and fair market value of $580,800, subject to a liability of $232,320. The partnership borrows $36,300 to finance construction of a parking lot in front of the building. At the end of the first year (December 31),...
Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of $375,000. One month prior to incorporating Broadbill, Allie borrows $100,000 for personal reasons and gives the lender a second mortgage on the land. Broadbill Corporation issues stock worth $300,000 to Allie and assumes the mortgages on the land. If an amount is zero, enter "0". a. What are the tax consequences to Allie and to Broadbill Corporation? Since...
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