Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in 100 percent of the corporation's stock. The property transferred to the corporation had the following fair marke and adjusted tax bases: Adjusted Tax Basis FMV $ 56,000 420,000 644,000 $ 1,120,000 $ 28,000 280,000 840,000 $ 1,148,000 Inventory Building Land Total The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value corporation's stock received in the exchange was $1,020,000. The transaction met the requirements to be tax- under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if ap at is the corporation's adjusted tax basis in each of the assets received in the exchange?

Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in 100 percent of the corporation's stock. The property transferred to the corporation had the following fair marke and adjusted tax bases: Adjusted Tax Basis FMV $ 56,000 420,000 644,000 $ 1,120,000 $ 28,000 280,000 840,000 $ 1,148,000 Inventory Building Land Total The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value corporation's stock received in the exchange was $1,020,000. The transaction met the requirements to be tax- under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if ap at is the corporation's adjusted tax basis in each of the assets received in the exchange?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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(2) XYZ Corporation distributes a building to Smith, an individual and fifty (50) percent shareholder. The building has a FMV of $50,000 and an adjusted basis of $68,000. Without considering the distribution of the building to Smith, XYZ Corporation had earnings and profits of $26,500. Smith adjusted basis in his interest in XYZ Corporation was equal to $15,000. (a) What is the amount of the section 301 distribution to Smith? (b) What is Smith's basis in the building following its distribution to Smith? (c) What is the amount of gain recognized by XYZ Corporation as a result of the distribution of the building to Smith? (d) What is the character of the distribution to Smith and what is the amount of XYZ's earnings and profits following the distribution?
Just need answers for e and g.
Sylvia is the sole shareholder of Strained Ltd., a taxable Canadian corporation. Sylvia transferred a non-depreciable capital property having adjusted cost base of $40,000 and a fair market value of $50,000 to Strained Ltd. in exchange for the following package of consideration. Cash $3,000 Debt 2,000 Preferred shares (FMV and legal stated capital) 15,000 Common Shares (FMV and legal stated capital) 30,000 Total 50,000 Sylvia and Strained Ltd. made a joint election under section 85, electing a transfer price of $40,000. The cost to Sylvia of the common shares received as consideration is: Select one: A) $35,000 B) $23,000 C) $23,333 D) $20,000
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A and B form A and B corporation. A transferred a lot located in Western Maryland that has a Fair Market Value of $250,000 and a basis of $50,000 for fifty-percent of the stock in A and B. B transferred a building with a Fair Market Value (FMV) of $120,000 and a basis of $24,000. B also provided services worth $10,000 for 50% of the stock of A and B. Question: What are the tax consequences to A and to B as a result of these transactions? Be sure to discuss whether (a) Section 351 applies and the reason(s); and (b) what gain or loss or income if any that A and B would recognize as a consequence of these transactions?
1
Parent Corporation purchased 80 percent of the stock of Subsidiary Corporation in one transaction for $200,000. The remaining 20 percent is owned by the MAC partnership. Subsidiary's only asset is an office building depreciated on the straight-line method, with an adjusted basis of $50,000 and a value of $400,000. It is subject to a mortgage of $140,000. a. If Parent makes a Code Sec. 338 election, what are the tax consequences to Parent, Subsidiary and MAC? b. If Parent does not make a Code Sec 338 election and liquidates Subsidiary under the Code Sec. 332, what are the tax consequences to Parent, Subsidiary, and MAC?
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Ramon incorporated his 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: FMV Adjusted Tax Basis Inventory $ 11,500 $ 4,800 Building 52,750 36,500 Land 122,000 60,000 Total $ 186,250 $ 101,300 The fair market value of the corporation’s stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation? b. What amount of gain or loss does Ramon recognize on the transfer of the property to his corporation?
[The following information applies to the questions displayed below.] 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 Adjusted Tax Basis $ 34,000 340,000 1,020,000 FMV $ 68,000 510,000 782,000 $ 1,360,000 $ 1,394,000 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 $1,260,000. 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.) Problem 08-40 Part d (Algo) d. What is the corporation's adjusted tax basis in each of the assets received in the exchange? Adjusted basis Land $
2. Ramon incorporated his 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: FMV Adjusted Tax Basis Inventory $ 10,000 $ 4,000 Building 50,000 30,000 Land 100,000 50,000 Total $ 160,000 $ 84,000 The fair market value of the corporation’s stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) What amount of gain or loss does Ramon recognizeon the transfer of the property to his corporation?
Tesla Incorporated and BMW Company entered into an exchange of real property. Here is the information for the properties to be exchanged. Tesla: FMV $800,000 Adjustasted tax basis $600,000 Mortgage $ 170,000 BMW: FMV $715,000 Adjustasted tax basis $500,000 Mortgage $0 Pursuant to the exchange, BMW assumed the mortgage on the Teslas property. Compute Tesla's tax basis in the property received from BMW.