Zhang incorporated her sole proprietorship by transferring
inventory, a building, and land to the corporation in return for
100 percent of the corporation’s stock. The property transferred to
the corporation had the following fair market values and adjusted
bases:
FMV | Adjusted Basis | ||||
Inventory | $ | 52,000 | $ | 26,000 | |
Building | 390,000 | 260,000 | |||
Land | 598,000 | 780,000 | |||
Total | $ | 1,040,000 | $ | 1,066,000 | |
The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation’s stock received in the exchange was $940,000. The transaction met the requirements to be tax-deferred under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
c. What is Zhang’s tax basis in the stock she receives in the exchange?
Assume the corporation assumed a mortgage of $1,140,000 attached to the building and land. Assume the fair market value of the building is now $650,000 and the fair market value of the land is $1,378,000. The fair market value of the stock remains $940,000.
g. What is the corporation’s adjusted basis in each of the assets received in the exchange?
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Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in...
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market value and adjusted basis. FMV Adjusted Basis Inventory $ 20,000 $ 11,000 Building 250,000 100,000 Land 530,000 300,000 Total $ 800,000 $ 411,000 The corporation also assumed a mortgage of $500,000 attached to the building and land. The fair market value of the...
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market value and adjusted basis. FMV Adjusted Basis Inventory $ 20,000 $ 11,000 Building 150,000 100,000 Land 230,000 300,000 Total $ 400,000 $ 411,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation’s stock...
Zhang incorporated her sole proprietorship by transferring
inventory, a building, and land to the corporation in return for
100 percent of the corporation’s stock. The property transferred to
the corporation had the following fair market values and adjusted
bases:
The corporation also assumed a mortgage of $100,000 attached to
the building and land. The fair market value of the corporation’s
stock received in the exchange was $860,000. The transaction met
the requirements to be tax-deferred under §351. (Negative amount
should...
Callie incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and tax bases: Tax FMV Basis Inventory $ 34,500 $ 17,000 Building 193,000 147,000 Land 321,750 329,000 Total $ 549,250 $ 493,000 The corporation also assumed a mortgage of $135,750 attached to the building and land. The fair market value of the corporation’s stock...
Required information [The following information applies to the questions displayed below. Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adiusted bases: Adjusted FMV Basis Building Land Total Inventory 64,000 32,000 480,000 736,000 320,000 960,000 $1,280,000 $1,312,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The...
Required information The following information applies to the questions displayed below.) Ivan incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted bases: Inventory Building Land Total FMV $ 19,600 83,500 78,250 $181,350 Adjusted Basis $ 37,250 54,750 40,250 $132,250 The fair market value of the corporation's stock received in the exchange equaled...
Mackenzie incorporates her sole proprietorship, transferring it to newly formed Omega Corporation. The assets transferred have an adjusted basis of $300,000 and a fair market value of $400,000. Also transferred was $50,000 in liabilities, $5,000 of which was personal and the balance of $45,000 being business related. In return for these transfers, Mackenzie receives all of the stock in Omega Corporation. None of the above Omega Corporation has a basis of $305,000 in the property. Omega Corporation has a basis...
Naomi incorporates her Sole Proprietorship, transferring its assets to a newly formed Ceasar Corporation. The assets transferred have an Adjusted Basis of $100,000 and a Fair Market Value of $250,000. Also transferred was $30,000 in liabilities, $25,000 of which was for personal (non-business) purposes and the remaining $5,000 being business related. In return for these transfers, Naomi receives all of the stock in Ceasar Corporation. Which of the following is correct? Ceasar Corporation will have a basis of $130,000 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...
82. In 2018, Sally transferred a building with an adjusted basis of $40,000 and a fair market value of $45,000 to Sandy Corporation. In exchange, she received the following: 80% of Sandy Corporation's only class of stock, FMV of $20,000 Equipment with a FMV of $25,000 and an adjusted basis of $10,000 What is Sandy Corporation's basis in the building received in the transfer? $5,000 $25,000 $45,000 $50,000 None of the above