(1) Read IRC 351 and 357 B. (2) Whitney and Kate are deciding on whether to open up a partnership or a corporation. Please provide three questions to guide them in their decision. (3) Eventually Whitney and Kate decide to open a corporation and own it equally. Whitney transfers a car with a FMV of $25 and a cost basis of $5 in exchange of shares of the new corporation. Kate transfers $50 in exchange of shares of the new corporation. Please explain the tax consequences of: ● Whitney • Kate ● Corporation
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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