Elias and Susana form a Corporation (E & S Manufacturing, Ltd.) in 2019. Elias contributed a...
- Elias and Susana form a Corporation (E & S Manufacturing, Ltd.) in 2019. Elias contributed a machine with a fair value of $60,000 and a basis to him of $9,000 to the corporation in exchange for 40 shares of common stock and $30,000 cash. The machine originally cost Elias $50,000. Susana contributed a Patent with a zero basis and a fair value of $40,000 in exchange for 40 shares of common stock. No other shares were issued.
Explain the tax effects on both of them and the Corporation including their respective gains, losses, the nature of those items and the basis in the assets they now hold and holding period.
Homework Answers
Ans: for above case if any profits or gains are arising in transfer of capital asset effected in the financial year shall be chargeable to income tax under the capital gains.
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Elias and Susana form a Corporation (E & S Manufacturing,
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In the current year, Mick, Hank, and Lulu form Hades Corporation Mick contributes land (a capital asset) having a $125,000 FMV in exchange for 145 shares of Hades stock. Ho purchased the land three years ago for $140,000 Hank contributos machinery (Sec. 1231 property purchased four years ago) having a $130,000 adjusted basis and a $75,000 FMV in exchange for 105 shares of Hades stock Lulu contributes services worth $50,000 in exchange for 40 shares of Hades stock Read the...
In the current year, Mick, Hank, and form Hades Corporation Mick contributes and a capital asset)...
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, LeviLevi, and RickRick form Stand UpStand Up Corporation and transfer the following items to Stand...
, LeviLevi, and RickRick form Stand UpStand Up Corporation and
transfer the following items to Stand UpStand Up:
a. Is the exchange nontaxable under Sec. 351? Explain the tax
consequences of the exchange to JoeJoe, LeviLevi, RickRick, and
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b. How would your answer to Part a change if LeviLevi instead
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Torey Corporation was organized on April 1, with an authorization of 25,000 shares of six percent,...
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Stockholders' Equity: Transactions and Balance Sheet Presentation Torey Corporation was organized on April 1, with an...
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Stockholders' Equity: Transactions and Balance Sheet Presentation Torey Corporation was organized on April 1, with an...
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Pete, Kaley, and George form Joker Corporation. Pete contributes land (a capital asset) having a $5,000...
Pete, Kaley, and George form Joker Corporation. Pete contributes land (a capital asset) having a $5,000 adjusted basis and a $13,000 FMV to Joker in exchange for Joker twenty-year notes having a $13,000 face value. Kaley contributes equipment (Sec. 1231 property) having a $21,000 adjusted basis and a $27,000 FMV for 80 shares of Joker stock. She previously claimed $7,500 of depreciation on the equipment. George contributes $26,000 cash for 80 shares of Joker stock. Read the requirements. Requirement a....
In the current year, Mick, Hank, and Lulu form Hades Corporation Mick contributes land (a capital asset) having a $125,000 FMV in exchange for 145 shares of Hades stock. Ho purchased the land three years ago for $140,000 Hank contributos machinery (Sec. 1231 property purchased four years ago) having a $130,000 adjusted basis and a $75,000 FMV in exchange for 105 shares of Hades stock Lulu contributes services worth $50,000 in exchange for 40 shares of Hades stock Read the...
In the current year, Mick, Hank, and form Hades Corporation Mick contributes and a capital asset) having a $125,000 EMV in exchange for 145 shares of Hades stock He purchased the land three years for $140 000 Hank contributes machinery (See 1231 property purchased four years ) having a $130 000 adjusted basis and a $75 000 FMV in exchange for 105 shares of Hades stock contributes Services worth $50 000 in exchange for 40 shares of Hades stock Read...
, LeviLevi, and RickRick form Stand UpStand Up Corporation and
transfer the following items to Stand UpStand Up:
a. Is the exchange nontaxable under Sec. 351? Explain the tax
consequences of the exchange to JoeJoe, LeviLevi, RickRick, and
Stand UpStand Up.
b. How would your answer to Part a change if LeviLevi instead
had received 220220 shares of common stock and 220220 shares of
preferred stock?
c. How would your answer to Part a change if RickRick instead
had contributed...
On December 1, 2017, Abel Corporation exchanged 20,000 shares of its $10 par value common stock held in treasury for a used machine. The treasury shares were acquired by Abel at a cost of $40 per share, and are accounted for under the cost method. On the date of the exchange, the common stock had a market value of $55 per share (the shares were originally issued at $30 per share). As a result of this exchange, Abel's total stockholders'...
Torey Corporation was organized on April 1, with an authorization of 25,000 shares of six percent, $50 par value preferred stock and 200,000 shares of $5 par value common stock. During April, the following transactions affecting stockholders' equity occurred: Apr. 1 Issued 80,000 shares of common stock at $40 cash per share. 3 Issued 2,000 shares of common stock to attorneys and promoters in exchange for their services in organizing the corporation. The services were valued at $31,000. 8 Issued...
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Stockholders' Equity: Transactions and Balance Sheet Presentation Torey Corporation was organized on April 1, with an authorization of 25,000 shares of six percent, $50 par value preferred stock and 200,000 shares of $5 par value common stock. During April, the following transactions affecting stockholders' equity occurred: Apr. 1 Issued 80,000 shares of common stock at $40 cash per share. Issued 2,000 shares of common stock to attorneys and promoters in exchange for their services in 3 organizing the corporation. The...
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