Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth...
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 basis in the land and the machinery? Please show solutions.
Crane Corporation has a basis of $__________ in the land and a basis of $___________ in the machinery. Crane either has a deduction of $___________ for the services provided by Patricia, or it will capitalize the $______________ as organizational costs.
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Dan Knight and Patricia Chen, who are good friends, form Crane
Corporation. Dan transfers land (worth...
Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth...
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...
Problem 4-30 (LO. 1) Dan Knight and Patricia Chen, who are good friends, form Crane Corporation....
Problem 4-30 (LO. 1) Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers and worth $200,000, basis of 60.000 for 50% of the stock in Crane. Patricia transfers machinery (worth $150,000, adjusted basis of 570.000) and provide services worth $50,000 for 50% of the stock a. Will the transfers qualify under 3517 Yes because all of Patricia's stockscounted in determining control since the property she transferred has than a nominal value in comparison to the...
Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth...
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)....
1- nn and Bob form Robin Corporation. Ann transfers property worth $352,500 (basis of $123,375) for...
1- nn and Bob form Robin Corporation. Ann transfers property worth $352,500 (basis of $123,375) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $141,000 (basis of $28,200) and for legal services (worth $14,100) in organizing the corporation. a. What gain or income, if any, will the parties recognize on the transfer? Ann recognizes of $. Bob recognizes of $. b. What basis do Ann and Bob have in the Robin Corporation stock? Ann has a basis of...
Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150,000) for 70...
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. What gain or income, if any, will the parties recognize on the transfer? Ann recognizes a gain of $______ and Bob recognizes a gain of $_____ and compensation income of $______. What basis do Ann and Bob have in...
Kevin transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for...
Kevin transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for all of Robin’s stock, worth $300,000, and a 10-year note. The note was executed by Robin Corp. and made payable to Kevin in the amount of $200,000. Because of the transfer: a. Kevin does not recognize gain. b. Kevin recognizes gain of $400,000. c. Robin Corporation has a basis of $100,000 in the land. d. Robin Corporation has a basis of $300,000 in the...
Problem 18-31 (Algorithmic) (LO. 1, 3) Ann and Bob form Robin Corporation. Ann transfers property worth...
Problem 18-31 (Algorithmic) (LO. 1, 3) Ann and Bob form Robin Corporation. Ann transfers property worth $322,500 (basis of $112,875) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $129,000 (basis of $25,800) and for legal services (worth $12,900) in organizing the corporation. If there is no gain or loss, enter "0" for the amount. a. What gain or income, if any, will the parties recognize on the transfer? Ann recognizes of $ Bob recognizes of...
Erica transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for...
Erica transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for all of Robin's stock, worth $300,000, and a 10-year note. The note was executed by Robin and made payable to Erica in the amount of $200,000. As a result of the transfer: a. Erica recognizes gain of $400,000. b. Robin Corporation has a basis of $100,000 in the land. c. Robin Corporation has a basis of $300,000 in the land. d. Erica does not...
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...
Wayne and Paul form ABC Corporation with the following investments. Wayne transfers machinery (basis of $40,000...
Wayne and Paul form ABC Corporation with the following investments. Wayne transfers machinery (basis of $40,000 and fair market value of $100,000), while Paul transfers land (basis of $20,000 and fair market value of $90,000) and services rendered (worth $10,000) in organizing the corporation. Each is issued 25 shares in ABC Corporation. With respect to the transfers: A. Wayne has no recognized gain; Paul recognizes income/gain of $80,000. B. Neither Wayne nor Paul has recognized gain or income on the...
Problem 4-30 (LO. 1) Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers and worth $200,000, basis of 60.000 for 50% of the stock in Crane. Patricia transfers machinery (worth $150,000, adjusted basis of 570.000) and provide services worth $50,000 for 50% of the stock a. Will the transfers qualify under 3517 Yes because all of Patricia's stockscounted in determining control since the property she transferred has than a nominal value in comparison to the...
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 18-31 (Algorithmic) (LO. 1, 3) Ann and Bob form Robin Corporation. Ann transfers property worth $322,500 (basis of $112,875) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $129,000 (basis of $25,800) and for legal services (worth $12,900) in organizing the corporation. If there is no gain or loss, enter "0" for the amount. a. What gain or income, if any, will the parties recognize on the transfer? Ann recognizes of $ Bob recognizes of...
Erica transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for all of Robin's stock, worth $300,000, and a 10-year note. The note was executed by Robin and made payable to Erica in the amount of $200,000. As a result of the transfer: a. Erica recognizes gain of $400,000. b. Robin Corporation has a basis of $100,000 in the land. c. Robin Corporation has a basis of $300,000 in the land. d. Erica does not...
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...
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