Tax Accounting

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Tax Accounting

Questions 1-15 are based on the following information:

Five individuals, A, B, C, D, and E, formed X Co. After making the following transfers to X Co., they own 100% of X Co:

A	$40,000 cash and $15,000 worth of services
B	Property:	FMV $50,000	BASIS $50,000	MORTGAGE $30,000
C	Property:	FMV $80,000	BASIS $20,000	MORTGAGE $30,000
D	Property:	FMV $26,000	BASIS $56,000
E	Property:	FMV $73,000 (capital asset)	BASIS $30,000	MORTGAGE $3,000 (Depreciation recapture potential of $7,000)

In return, they receive the following from X Co:

A	$55,000 Stock
B	$15,000 Stock + $5,000 Cash
C	$42,000 Stock + $8,000 Cash
D	$22,000 Stock + $4,000 Cash
E	$52,000 Stock + $18,000 Cash

Flag question: Question 1

Question 12 pts

A's reportable income and his basis in the X Co. stock is

Group of answer choices

$15,000 ordinary income and $55,000 basis

None of these.

$15,000 ordinary income and $51,000 basis

$55,000 ordinary income and $55,000 basis

Flag question: Question 2

Question 22 pts

X Co.'s net recognized gain or loss or expense on the distribution to A is

Group of answer choices

$40,000 gain and $15,000 expense

$15,000 expense

None of these.

$55,000 expense

Flag question: Question 3

Question 32 pts

B's recognized gain or loss is

Group of answer choices

None of these.

$5,000 gain

0

$35,000 gain

Flag question: Question 4

Question 42 pts

B's basis in the X Co. stock is

Group of answer choices

$55,000

$50,000

$15,000

None of these.

Flag question: Question 5

Question 52 pts

X Co.'s basis in the property received from B is

Group of answer choices

$25,000

$55,000

None of these.

$50,000

Flag question: Question 6

Question 62 pts

C's recognized gain or loss is

Group of answer choices

$8,000 gain

0

None of these.

$18,000 gain

Flag question: Question 7

Question 72 pts

C's basis in the X Co. stock is

Group of answer choices

None of these.

0

$80,000

$20,000

Flag question: Question 8

Question 82 pts

X Co.'s basis in the property received from C is

Group of answer choices

$38,000

None of these.

$80,000

0

Flag question: Question 9

Question 92 pts

D's recognized gain or loss is

Group of answer choices

0

None of these.

<$30,000> loss

<$4,000> loss

Flag question: Question 10

Question 102 pts

D's basis in the X Co. stock is

Group of answer choices

$52,000

$22,000

None of these.

$56,000

Flag question: Question 11

Question 112 pts

X Co.'s basis in the property received from D is

Group of answer choices

$56,000

$47,000

$26,000

None of these.

Flag question: Question 12

Question 122 pts

E's recognized gain or loss is

Group of answer choices

$11,000 capital gain; $7,000 ordinary income

None of these.

$11,000 ordinary income; $7,000 capital gain

$18,000 capital gain

Flag question: Question 13

Question 132 pts

E's basis in the X Co. stock is

Group of answer choices

$27,000

None of these.

$73,000

$30,000

Flag question: Question 14

Question 142 pts

X Co.'s basis in the property received from E is

Group of answer choices

None of these.

$73,000

$30,000

$48,000

Flag question: Question 15

Question 152 pts

X Co.'s recognized gain or loss on the distribution to E is

Group of answer choices

None of these.

0

$52,000 gain

<$52,000> loss

accounting

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