28. Lindsay and Malcolm form Yellow Corporation. Lindsay transfers equipment worth $950,000 (basis of $200,000) and cash of $50,000 to Yellow Corporation for 50% of its stock. Malcolm transfers a building and land worth $1,050,000 (basis of $400,000) for 50% of Yellow's stock and $50,000 in cash. a. Lindsay recognizes no gain; Malcolm recognizes gain of $50,000. b. Lindsay recognizes a gain of $50,000; Malcolm has no gain. c. Neither Lindsay nor Malcolm recognizes gain.

28. Lindsay and Malcolm form Yellow Corporation. Lindsay transfers equipment worth $950,000 (basis of $200,000) and cash of $50,000 to Yellow Corporation for 50% of its stock. Malcolm transfers a building and land worth $1,050,000 (basis of $400,000) for 50% of Yellow's stock and $50,000 in cash. a. Lindsay recognizes no gain; Malcolm recognizes gain of $50,000. b. Lindsay recognizes a gain of $50,000; Malcolm has no gain. c. Neither Lindsay nor Malcolm recognizes gain.

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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6a.Harry and Sally formed the Evergreen partnership by contributing the following assets in exchange for a 50 percent capital and profits interest in the partnership: Basis Fair Market Value Harry: Cash $ 30,000 $ 30,000 Land 100,000 120,000 Totals $ 130,000 $ 150,000 Sally: Equipment used in a business 200,000 150,000 Totals $ 200,000 $ 150,000 What is Evergreen’s tax basis in its assets?
Tony Smith and Bill Jones buy property for $500,000. Tony and Bill organize a corporation when the property has a fair market value of $700,000. They transfer the property to the corporation for all its authorized capital stock, which has a par value of $700,000. What amount of gain is recognized by Tony? A. $0 B. $250,000 C. $500,000 D. $700,000
See attached. #4
Hayden owns 100% of the shares of ABC Co. Hayden's spouse owns 100% of the shares of XYZ Co. The shares of ABC Co. are valued at $50,000 with an ACB and PUC of $1000. The couple planning for XYZ Co. to pay Hayden $50,000 in cash for the shares in ABC Co. Which of the following will result from this sale? Multiple Choice Hayden will recognize a capital gain of $49,000. Hayden will recognize a deemed dividend of $50,000 and a capital gain of $0. Hayden will recognize a deemed dividend of $49,000 and a capital gain of $0. Hayden will recognize a capital gain of $50,000.