in terms of their divorce agreement, mary transferred Zain Corporation stock (basis $40,000; FMV $55,000) to...
Homework Answers
Option B is the correct answer
Section 1041 and IRS publication 504 and provides the required information to answer the question.
When the property transferred to a former spouse as a property settlement in case of divorce, there is gain or loss attributed to the transferring spouse.
Hence, there is no gain or loss to Mary.
The transferee's adjusted basis of the transferred asset is the same as the transferor's adjusted basis just before the transfer.
Hence, Jack's basis = $40,000
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in
terms of their divorce agreement, mary transferred Zain Corporation
stock (basis $40,000; FMV $55,000) to...
a. Under a 2017 divorce agreement, Joan is required to pay her ex-husband, Bill, $4,160 a...
a. Under a 2017 divorce agreement, Joan is required to pay her ex-husband, Bill, $4,160 a month until their daughter is 18 years of age. At that time, the required payments are reduced to $2,912 per month. 1. How much of each $4,160 payment may be deducted as alimony by Joan? 4,160 ) 2. How much of each $4,160 payment must be included in Bill's taxable income? 3. How much would be deductible/included if the divorce agreement were dated 2019?...
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...
Answer the following questions: If your answer is zero, enter "0". a. Under a 2017 divorce...
Answer the following questions: If your answer is zero, enter "0". a. Under a 2017 divorce agreement, Joan is required to pay her ex-husband, Bill, $1,365 a month until their daughter is 18 years of age. At that time, the required payments are reduced to $955 per month. 1. How much of each $1,365 payment may be deducted as alimony by Joan? $ 2. How much of each $1,365 payment must be included in Bill's taxable income? $ 3. How...
The Beta Corporation owns a building with a basis of $20,000 that is subject to a...
The Beta Corporation owns a building with a basis of $20,000 that is subject to a debt of $80,000. The FMV of the building is $50,000. Beta distributes the property in a nonliquidating distribution (along with the debt) to Ben, its sole shareholder. What is Ben’s basis in the building received from Beta in the distribution? a. $80,000. b. $50,000. c. zero d. $30,000. e. none of the above. The Beta Corporation owns a building with a basis of $20,000...
3. Southern Corp., an S corporation, has no corporate E&P from years as a C corp....
3. Southern Corp., an S corporation, has no corporate E&P from years as a C corp. At the end of the year, it distributes a baseball court to its 50% shareholder, Jack, in an operating distribution. The fair market value of the court is $80,000, and its tax basis is $50,000. Mr. Jack's basis in his stock is $15,000. A. How much gain (loss) does Mr. Jack recognize as a result of the distribution (there may be more than one...
QUESTION 27 Under the terms of a property settlement executed during the current year, Cindy transferred...
QUESTION 27 Under the terms of a property settlement executed during the current year, Cindy transferred a house worth $350,000 to her ex husband, Carl. The property has a tax basis to Cindy of $300,00 a How much taxable gain or loss must be recognized by Cindy at the time of the transfer? What is Carl's tax basis in the property he received from Cindy? b TT T Arial 3 (12pt) T.EE
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...
Problem 4-33 (LO. 1,3) Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis...
Problem 4-33 (LO. 1,3) Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150,000) for 70 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 recoonize on the transfer? Ann recognizes no gain or loss X of 0 X and Bob recognizes no gain or loss has compensation income of...
Exercise 20-14 (LO. 1) Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated....
Exercise 20-14 (LO. 1) Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated. Pedro and Pittro each own 50% and Pittro owns 50% of the stock in the corporation. Osprey has the following assets (none of which were acquired in a § 351 or contribution to capital transaction) that are distributed in complete liquidation of the corporation Adjusted Fair Market Value Cash Land Equipment Basis $300,000 200,000 250,000 $300,000 440,000 140,000 Assume that Osprey Corporation distributes the...
t sold his s corporation stock for $100,000. His basis in the stock was $40,000, which...
t sold his s corporation stock for $100,000. His basis in the stock was $40,000, which was also its book value. his share of s corporation assets included depreciable equipment with a basis of $10,000 and a fair market value of $25,000. which of the following statements is correct regarding the sale by T? A) if T was a material participant in the LLC entity, his taxable capital gain for regular tax purposes is $45,000. B) if T was a...
a. Under a 2017 divorce agreement, Joan is required to pay her ex-husband, Bill, $4,160 a month until their daughter is 18 years of age. At that time, the required payments are reduced to $2,912 per month. 1. How much of each $4,160 payment may be deducted as alimony by Joan? 4,160 ) 2. How much of each $4,160 payment must be included in Bill's taxable income? 3. How much would be deductible/included if the divorce agreement were dated 2019?...
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...
3. Southern Corp., an S corporation, has no corporate E&P from years as a C corp. At the end of the year, it distributes a baseball court to its 50% shareholder, Jack, in an operating distribution. The fair market value of the court is $80,000, and its tax basis is $50,000. Mr. Jack's basis in his stock is $15,000. A. How much gain (loss) does Mr. Jack recognize as a result of the distribution (there may be more than one...
QUESTION 27 Under the terms of a property settlement executed during the current year, Cindy transferred a house worth $350,000 to her ex husband, Carl. The property has a tax basis to Cindy of $300,00 a How much taxable gain or loss must be recognized by Cindy at the time of the transfer? What is Carl's tax basis in the property he received from Cindy? b TT T Arial 3 (12pt) T.EE
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...
Problem 4-33 (LO. 1,3) Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150,000) for 70 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 recoonize on the transfer? Ann recognizes no gain or loss X of 0 X and Bob recognizes no gain or loss has compensation income of...
Exercise 20-14 (LO. 1) Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated. Pedro and Pittro each own 50% and Pittro owns 50% of the stock in the corporation. Osprey has the following assets (none of which were acquired in a § 351 or contribution to capital transaction) that are distributed in complete liquidation of the corporation Adjusted Fair Market Value Cash Land Equipment Basis $300,000 200,000 250,000 $300,000 440,000 140,000 Assume that Osprey Corporation distributes the...
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