1 Betty contributed to AlphaBeta Corporation a building with anadjusted basis to Betty of $50,000 and a fair market value of$150,000 that was subject to a mortgage of $120,000 inexchange for 50 percent of the voting common stock (the onlyclass of stock) of the AlphaBeta Corporation. The AlphaBetaCorporation will assume the mortgage on the building. Aspart of the same transaction, Alfie contributed to AlphaBetaCorporation cash of $30,000 in exchange for the other 50percent of the voting common stock of AlphaBetaCorporation. How much gain or loss, if any, does Bettyrecognize with respect to this transaction?a. $0.b. $10,000.c. $70,000.d. $100,000.

Step: 1 Introduction to Accounting Accounting is the assessment, processing, and recording of…

Answered: 1 Betty contributed to AlphaBeta…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter18: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 21CE

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Betty contributed to Alpha Beta Corporation a building with an adjusted basis to Betty of $50,000 and a fair market value of $150,000 that was subject to a mortgage of $120,000 in exchange for 50 percent of the voting common stock (the only class of stock) of the Alpha Beta Corporation. The Alpha Beta Corporation will assume the mortgage on the building. As part of the same transaction, Alfie contributed to Alpha Beta Corporation cash of $30,000 in exchange for the other 50 percent of the voting common stock of Alpha Beta Corporation. How much gain or loss, if any, does Betty recognize with respect to this transaction? a. $0. b. $10,000. c. $70,000. d. $100,000.
A transfers land to Newco in exchange for 100% of Newco's stock. The land has a basis of $50, FMV of S100 and is subject to a mortgage of S40. A) What are the consequences to each of the parties? B) Suppose in that the mortgage was placed on the property immediately before the transfer to Newco. A wanted cash in order to buy a yacht to be used for personal purposes, so he took out a mortgage on the land. Would this change your answer C) Suppose instead that the mortgage was for $60. Suppose further that this mortgage was incurred on the purchase of the property many years ago. Would this change your answer? D) Same as (c) except that A also transfers accounts payable of $10. A is a cash basis taxpayer. How would this change your answer?
1. Blue Corporation distributes land and building having a $70,000 adjusted basis and a $200,000 FMV to its sole shareholder, Marina. Blue has current and accumulated E&P exceeding $200,000. The property is subject to a $120,000 mortgage, which Marina assumes. What is the amount of the taxable dividend received by Marina? Group of answer choices $80,000 $70,000 $0 $130,000
(CO C) Suzanne transfers a building with an adjusted basis of $60,000 and a fair market value of $120,000 to ABC Company in return for 100% of its stock. The building is subject to a $90,000 mortgage, which ABC Company assumes. Please calculate the amount of any gain that Suzanne will need to report. Please also calculate Suzanne's basis in the stock
Father owns 40 % of Family Corporation (FC ) Son owns 30 % of FC and Daughter owns 30 % of FC (Father's 2 children are Son and Daughter) Father wants to retire and have Son and Daughter each own 50 % of FC Son and Daughter do not have enough money to buy Father's shares Father insists that the results of the transaction generate a capital gain for him rather than dividend income (Father has a high basis in FC shares.) You suggest that the FC reddem all of Father's shares of FC Which of the following statements is correct? O A. Because a redemption is the sale of shares to a Corporation, it will alaways result in a capital gain B. II Father becomes Chairman of the Board and President of FC after the redemption, Capital gain treatment will be available if the family attribution rules are waived OC. The redemption of all of Father's shares will result in capital gain treatment because it qualifies as a substantially disproportionate redemption OD. The redemption of all of Father's shares…
1. Bob transfers assets with a $100,000 FMV (basis $60,000) and $70,000 of business-related liabilities to a corporation in exchange for 100% of the corporation's stock with a FMV of $30,000. The corporation assumes the $70,000 mortgage. The transfer qualifies under Sec. 351. What is Bob's gain recognized on the transfer? Group of answer choices $10,000 $40,000 $0 $30,000
Company B and Firm W exchanged the following business real estate: FMV Mortgage Equity Required: Blackacre (exchanged by B) $ 400,000 (100,000) Whiteacre (exchanged by W) $525,000 (225,000) $ 300,000 $ 300,000 a. If B's adjusted basis in Blackacre was $240,000, compute B's realized gain, recognized gain, and basis in Whiteacre. b. If W's adjusted basis in Whiteacre was $100,000, compute W's realized gain, recognized gain, and basis in Blackacre. Complete this question by entering your answers Required A Required B If B's adjusted basis in Blackacre was $240,000, compu recognized gain, and basis in Whiteacre. Realized gain Recognized gain Basis Amount
Gerald received a one-third capital and profit (loss) interest in XYZ Limited Partnership (LP). In exchange for this interest, Gerald contributed a building with a FMV of $31,000. His adjusted basis in the building was $15,500. In addition, the building was encumbered with a $9,300 nonrecourse mortgage that XYZ, LP assumed at the time the property was contributed. What is Gerald's outside basis immediately after his contribution? Multiple Choice ___ $6,200. ___ $9,300. ___ $21,700. ___ $24,800.
Gerald received a one-third capital and profit (loss) interest in XYZ Limited Partnership (LP). In exchange for this interest, Gerald contributed a building with a FMV of $26,000. His adjusted basis in the building was $13,000. In addition, the building was encumbered with a $7,800 nonrecourse mortgage that XYZ, LP assumed at the time the property was contributed. What is Gerald's outside basis immediately after his contribution? $5,200. $7,800. $18,200. $20,800.
2 A transfers land to Newco in exchange for 100% of Newco's stock. The land has a basis of $50, FMV of $100 and is subject to a mortgage of $40. a. What are the consequences to each of the parties?
Jocelyn contributes land with a basis of $56,000 and fair market value of $84,000 and inventory with a basis of $19,000 and fair market value of $28,500 in exchange for 100% of Zion Corporation stock. The land is subject to a $14,000 mortgage. Determine Jocelyn's recognized gain or loss and the basis in the Zion stock received. If an amount is zero, enter "0". The exchange l § 357(a). As a result, Jocelyn has income of $ tax-free under § 351 because the release of a liability and a basis $ treated as boot under in her stock.
Corporation X owns a rental building with an FMV of $4,500, subject to a nonrecourse mortgage of $5,000. X's basis in the building is $2,000. X has E&P of $500. A, the only shareholder, has a basis of $300 in X stock. The rental building is distributed to A upon complete liquidation of X. Please comment on the issues raised below and any other advice you would provide to the client. What, if any, gain or loss recognized by Corporation X? What amount of E&P remains post-liquidation? What is the gain or loss recognized by A? What is A's basis in the rental building? Does the gain or loss to X and A change if the FMV of the building is $1,000 and the mortgage is also $1,000?

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