Susan incorporates her sole proprietorship by transferring assets with an FMV of $105,000 and an adjusted basis of $100,000 to the corporation for 100% of the stock ($105, 000). Susan has: Group of answer choices All of these. Taxable Loss of $5,000 Unrecognized Loss of $5,000 Recognized Loss of $5,000 None of these.

Susan incorporates her sole proprietorship by transferring assets with an FMV of $105,000 and an adjusted basis of $100,000 to the corporation for 100% of the stock ($105, 000). Susan has: Group of answer choices All of these. Taxable Loss of $5,000 Unrecognized Loss of $5,000 Recognized Loss of $5,000 None of these.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Antoine, Becky, and Colleen form ABC Corporation by contributing the following items in exchange for stock in ABC Corporation: Adjusted Basis Fair Market Value of property given of property given Shares of Stock Received Antoine: Cash $ 30,000 $30,000 Equipment 300,000 420,000 4500 shares Becky: Land $100,000 $480,000 3000 shares* Mortgage 150,000 (150,000) Colleen: Services $0 $ 50,000 500 shares Additional information: Colleen has…
Given the following information for a product: Direct labor hours: 0.25 hour/unit Direct labor costs: $20/hour Direct materials cost: S5/unit Overhead costs: 110% of direct labor Packaging and shipping: $2/unit Desired profit margin: 2096 of the total cost Suppose that a market survey has shown that the best competitor's selling price for the product is $19.50 per unit. After conducting a value engineering study, It was found that the material cost is high and another equal and less expensive material can be used to achieve the required target cost. What should the material cost per unit be to achieve the required target cost for the product?
s
C Corporation converts to S Corporation when the fair market value of its assets was $100,000 and its basis of those assets was $60,000. Three years later, S Corporation sells those assets for $120,000. What is the total gain recognized when S Corporation sells those assets for $120,000?
Acme Corporation is liquidated with Joe, sole shareholder, receiving property having an adjusted basis of $70,000 and an FMV of $100,000. Joe's basis in the Acme stock surrendered is $60,000. Describe the tax consequences to Joe and Acme as a result of the liquidation. Please explain step by step so I can understand the concepts, not just an answer.
Chip has an accrual - method, calendar - year sole proprietorship. On January 1, 2019, he creates accrual - method, calendar - year corporation and transfers to corporation, in exchange for all of corporation's stock(1 class), a single asset as follows: Asset (depreciable personality): Original Cost $100,000 Adjusted Basis $ 30,000 Value $250,000 Holding period = 7 years Determine the tax consequence to: 1. Chip 2. Corporation
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 tax bases: Inventory Building Land Total FMV $ 20,000 150,000 230,000 Adjusted Tax Basis $ 10,000 100,000 300,000 $ 400,000 $ 410,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $300,000. The transaction met the requirements to be tax-deferred under §351. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Required: a. What amount of gain or loss does Zhang realize on the transfer of the property to the corporation? b. What amount of gain or loss does Zhang recognize on the transfer of the property to the corporation? c. What is Zhang's tax basis in the stock…
am. 54.
ST ve t troma of 13. Arrow Corporation sold a capital asset in 20x3 (its There were no other capital transactions for Arrow in that year or any other until 20X8 when Arrow sold another capital asset resulting in a $50,000 gain. Taxable income for 20X8 without considering the capital transaction was $230,000. Which of the following statements is true with regard to these transactions? a. The $22,000 capital loss was carried forward and expired in 20X6. b. The $22,000 capital loss was deducted by Arrow in 20X3. c. Taxable income for 20X8 is $258,000. d. Taxable income for 20X8 is $280,000. e. None of the answers provided is correct. year of operations) resulting in a loss of $22,000, Fran Solt
A, an individual (“A”) and X Corporation (“X”) each transferred property with a fair market value (“FMV”) of $100,000 and an adjusted basis of $20,000 to newly formed C Corporation (“C”) in exchange for 10 shares of C Corporation stock. These are the only shares of C outstanding. Assuming the transfers are related: a. What income, gain or loss, if any does A recognize in this transaction? b. If C’s current E&P during the year were $30,000, and C distributed $40,000 cash to each of X, and A, during the year, what is X’ taxable income (assuming the distribution from C is X’ only transaction during the year)?
Monica contributes appreciated property (.e, Adjusted Basis of $65,000 and Fair Market Value of $100,000) to her business entity in a transaction which qualifies for nonrecognition of galin. Monica's ownership interest in the business entity is sbety percent (60%). The business entity later sells the appreciated property for $110,000. The property is not deprecdable. If the entity is a Regular (9 Corporation, Monica's Gross Income is increased from the sale of the property by the Corporation by $41,000, O True False QUESTION 5 Actual Dividends pald to shareholders of a Regular (C) Corporation result in Double Taxation. Likewise, Constructive Dividends (eg. Personal use of corporate property by a shareholder, etc.) result in Double Taxation. O False O True
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 tax bases: Adjusted Tax FMV Basis $ 56,000 420,000 $ 28,000 280,000 840,000 $ 1,148,000 Inventory Building 644,000 $ 1,120,000 Land Total 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 $1,020,000. The transaction met the requirements to be tax-deferred under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) Assume the corporation assumed a mortgage of $1,220,000 attached to the building and land. Assume the fair market value of the building is now $700,000 and the fair market value of the land is $1,484,000. The fair market value of the stock remains…