3)
a) Yes , because all of Patricia's stock is counted in determining control since the property she transferred has more nominal value in comparison to the value of the services rendered | |
b) | |
Dan recognizes no gain no loss on the transfer of the land. His basis in the Crane stock is $60,000, his basis in the land. Patricia recognizes compensation income of $50,000 on the transfer and Patricia has a basis of $80,000 in her Crane stock. | |
[$30,000 (basis of the machinery) + $50,000 (value of her services)] | 80000 |
c) | |
Crane Corporation has a basis of $60,000 in the land and a basis of $30,000 in themachinery. Crane either has a deduction of $50,000 for the services provided by Patriciaor has $50,000 to capitalize as organizational costs. |
d) | |
Filling Status | Single |
Your standard deduction: | 12000 |
Spoouse standard deduction | $0 |
Problem 4-30 (LO. 1) Dan Knight and Patricia Chen, who are good friends, form Crane Corporation....
Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth $200,000, basis of $60,000) for 50% of the stock in Crane. Patricia transfers machinery (worth $150,000, adjusted basis of $30,000) and provides services worth $50,000 for 50% of the stock. * What are the tax consequences to Dan and Patricia? Please show solutions. Patricia recognizes $_______________ on the transfer. Patricia has a basis of $____________ in her Crane stock. * What is Crane Corporation's...
Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth $200,000, basis of $60,000) for 50% of the stock in Crane. Patricia transfers machinery (worth $150,000, adjusted basis of $30,000) and provides services worth $50,000 for 50% of the stock. The services are required to be capitalized by Crane as organizational costs. Will the transfers qualify under § 351 (Yes or No) ? What is the gain or income recognized by Dan and Patricia ? What...
Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth $200,000, basis of $60,000) for 50% of the stock in Crane. Patricia transfers machinery (worth $150,000, adjusted basis of $30,000) and provides services worth $50,000 for 50% of the stock. d. Enter the results of this transaction to Patricia on her Form 1040 (page 1). Assume Patricia is single, age 40, has no other income, and claims a standard deduction of $12,200 (for 2019)....
Problem 4-33 (LO. 1, 3) Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150.000) for 20 shares in Robin Corporation. Bob receives 30 shares for property worth $15,000 (basis of $3,000) and for legal services (worth $165,000) in organizing the corporation. a. What gain or income, if any, will the parties recognize on the transfer? Ann recognizes pain of 1 5,000 X and Bob recognizes again compensation income of 165,000 of 15,000 X and has...
Comprehensive Problem 6-52 (LO 6-1, LO 6-2, LO 6-3) [The following information applies to the questions displayed below.] Read the following letter and help Shady Slim with his tax situation. Please assume that his gross income is $172,900 (which consists only of salary) for purposes of this problem. December 31, 2019 To the friendly student tax preparer: Hi, it’s Shady Slim again. I just got back from my 55th birthday party, and I’m told that you need some more information...
Hello, my name is Shady Slim. I understand you are going to help me figure out my gross income for the year... whatever that means. It's been a busy year and I'm a busy man, so let me give you the lowdown on my life and you can do your thing I was unemployed at the beginning of the year and got $2,000 in unemployment compensation. I later got a job as a manager for Roca Cola. I earned $57,500...