5. (a) A transfers a contract to perform services to Newco in exchange for 50% of Newco's stock. B transfersa tract of land with a basis of 50 and FMV of 100 in exchange for 50% of Newco's stock. What are the taxconsequences to all of the parties?(b) Suppose that in addition to transferring the services contract, A transfers cash of 20. A still receives 5096of the stock. How would this change your answer?() Suppose instead that in addition to transferring the services contract, A transfers cash of just 1 Howwould this change your answer?

Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

5. (a) A transfers a contract to perform services to Newco in exchange for 50% of Newco's stock B transfers a tract of land with a basis of 50 and FMV of 100 in exchange for 50% of Newco's stock. What are the tax consequences to all of the parties? (b) Suppose that in adition to transferring the services contract, A transfers cash of 20. A still receives 50% of the stock. How would this change your answer? (C) Suppose instead that in addition to transferring the services contract, A transfers cash of just 1. How would this change your answer?

5. (a) A transfers a contract to perform services to Newco in exchange for 50% of Newco's stock B transfers a tract of land with a basis of 50 and FMV of 100 in exchange for 50% of Newco's stock. What are the tax consequences to all of the parties? (b) Suppose that in adition to transferring the services contract, A transfers cash of 20. A still receives 50% of the stock. How would this change your answer? (C) Suppose instead that in addition to transferring the services contract, A transfers cash of just 1. How would this change your answer?

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter13: Property Transact Ions: Determination Of Gain Or Loss, Basis Considerations, And Nontaxable Exchanges

Section: Chapter Questions

Problem 37CE

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5. (a) A transfers a contract to perform services to Newco in exchange for 50% of Newco's stock. B transfers a tract of land with a basis of 50 and FMV of 100 in exchange for 50% of Newco's stock. What are the tax consequences to all of the parties? (b) Suppose that in addition to transferring the services contract, A transfers cash of 20. A still receives 50% of the stock. How would this change your answer?
5. (a) A transfers a contract to perform services to Newco in exchange for 50% of Newco's stock B transfers a tract of land with a basis of 50 and FMV of 100 in exchange for 50% of Newco's stock. What are the tax consequences to all of the parties?
Van Industries and Frat Corporation trade land in 2021. Van has an adjusted basis of $740,000 in land, whereas Frat's land has a fair market value of $700,000 and an adjusted basis of $660,000. a. What are Van's realised and acknowledged benefits? b. What are the realised and recognised profits to Vans if Frat additionally pays $80,000 in cash to Van? What exactly is Van's stake in the newly purchased land? Could you please show me the work? I'm stumped. Thanks!c c. What are Vee's realised and recognised gains if Form it assumes a $100,000 recourse loan on his land? What is Vee's stake in the newly purchased property?
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?
LO.4, 7 In December 2019, Carl Corporation sold land it held as an investment. The corporation received 50,000 in 2019 and a note payable (with adequate interest) for 150,000 to be paid in 2021. Carl Corporations cost of the land was 80,000. The corporation has a 90,000 net capital loss carryover that will expire in 2019. Should Carl Corporation report the sale in 2019 or use the installment method to report the income as payments are received?
27. G is a cash basis consultant. His balance sheet at the end of the year shows receivables of $100 and accounts payable for utilities of $30. b) If G transfers the receivables to a new corporation in exchange for 100% of the stock and the corporation assumes the liabilities is G taxed on the transfer?
Gis a cash basis consultant.His balance sheet at the end of the year shows receivables of $100 and accounts payable for utilities of $30. What is G's basis in the receivables? If G transfers the receivables to a new corporation in exchange for 100% of the stock and the corporation assumes the liabilities is G taxed on the transfer?
8. A, an individual, owns all 100 shares of X Co. A's basis in these shares is $1 per share ($100 total). 8a) A transfers 10 shares to X in exchange for cash of 10. How will this transaction be treated for tax purposes? 8b) Suppose instead that there are 2 shareholders, A and B. Each owns 50 shares of X Co. A transfers all 50 shares to X in exchange for cash of 50. How will this transaction be treated? 8c) Same as (b) except that A andBare husband and wife. Would this change your answer?
During 2021, Van Industries exchanges land with Frat Corporation. Van’s adjusted basis in land is $740,000 and the land Frat provides has a fair market value of $700,000 and an adjusted basis of $660,000. a. What are the realized and recognized gains to Van? b. If Frat also pays $80,000 cash to Van, what are the realized and recognized gains to Vans? What is Van’s basis in the acquired land? Will you please show the work I am lost on this one. Thanks! c. If Form it instead assumes a $100,000 recourse loan on Vee’s land, what are the realized and recognized gains to Vee? What is Vee’s basis in the acquired land?
Mai is going to contribute the following assets to a business entity in exchange for an ownership interest. Adjusted Basis FMV Cash $100,000 $100,000 Land and building 60,000 95,000 What are the tax consequences of the contribution to Mai if the business entity is a(n): a. Sole proprietorship? b. General partnership? c. Limited partnership? d. C corporation? e. S corporation?
Firm E must choose between two alternative transactions. Transaction 1 requires a $9,150 cash outlay that would be nondeductible in the computation of taxable income. Transaction 2 requires a $14,800 cash outlay that would be a deductible expense. Required: a. Determine the after-tax cost for each transaction. Assume Firm E's marginal tax rate is 25 percent. b. Determine the after-tax cost for each transaction. Assume Firm E's marginal tax rate is 45 percent.
Mai is going to contribute the following assets to a business entity in exchange for an ownership interest. Adjusted Basis FMVCash $100,000 $100,000Land and building 60,000 95,000What are the tax consequences of the contribution to Mai if the business entity is a(n):a. Sole proprietorship? b. General partnership? c. Limited partnership? d. C corporation? e. S corporation?