Seven years ago, Eleanor transferred property she had used in her sole proprietorship to Blue Corporation for 2,000...
Question 1 Which of the following is an incorrect statement regarding the tax consequences of a § 306 stock disposition? In a sale of § 306 stock, the shareholder generally recognizes ordinary income equal to the fair market value of the preferred stock on the date it was acquired in the stock dividend. No loss is recognized on a sale of § 306 stock. The issuing corporation’s E & P is not reduced by a sale of § 306 stock....
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market value and adjusted basis. FMV Adjusted Basis Inventory $ 20,000 $ 11,000 Building 150,000 100,000 Land 230,000 300,000 Total $ 400,000 $ 411,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation’s stock...
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market value and adjusted basis. FMV Adjusted Basis Inventory $ 20,000 $ 11,000 Building 250,000 100,000 Land 530,000 300,000 Total $ 800,000 $ 411,000 The corporation also assumed a mortgage of $500,000 attached to the building and land. The fair market value of the...
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and adjusted bases: FMV Adjusted Basis Inventory $ 52,000 $ 26,000 Building 390,000 260,000 Land 598,000 780,000 Total $ 1,040,000 $ 1,066,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation’s stock...
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and adjusted bases: The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation’s stock received in the exchange was $860,000. The transaction met the requirements to be tax-deferred under §351. (Negative amount should...
8:12 < Chapter 20 Homework Assignment Q 1. Dove Corporation (E & Pof S800,000) has 1,000 shares of stock outstanding. The shares are owned as follows: Julia, 600 shares; Maxine (Julia's sister), 300 shares; and Janine (Julia's daughter), 100 shares. Dove Corporation owns land (basis of S300,000, fair market value of $260,000) that it purchased as an investment seven years ago. Dove distributes the land to Julia in exchange for all of her shares in the corporation. Julia had a...
QUESTION 1 Manuela has worked as an accountant in her own accounting business, a sole proprietorship, for more than seven years. Among the services she offers is tax return filing and personal investment advising. Which of the following is true of Manuela’s business? A. Manuela has little control over the management and operations of her business. B. Manuela has unlimited liability. C. Outside funding for the business has been easy for Manuela to obtain. D. Manuela had varied and complicated...