Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part oftheir discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's taxaccounting balance sheet. The relevant information is summarized as follows: (Leave no answer blank. Enter zero ifapplicable. Negative amounts should be indicated by a minus sign.)Ad justed TaxBasis$ 6,0009,00056,500139,000$ 210,500PMVAppreciationCashReceivablesBuilding$ 6,0009,000113,000239,000६ 367,00056,500100,000$ 156,500LandTotalPayablesMortgage$ 12,000132,000$ 144,000$ 12,000132,000$144,000Total* The mortgage is attached to the building and land.Ernesto was asking for $493,000 for the company. His tax basis in the BLI stock was $150,000. Included in the sales pricewas an unrecognized customer list valued at $150,000. The unallocated portion of the purchase price ($120,000) will berecorded as goodwill.Assume Ernesto agrees to sell his stock in BLI to Amy and Brian for $493,000.b. What amount of gain or loss does Ernesto recognize if the transaction is structured as a stock sale to Amy and Brian?Gan or loss recognized

A Recognized gain occurs when an investment or object is sold for a higher price than when it was…

Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.) Adjusted Tax Basis $ 6,000 9,000 56,500 139,000 PMV Appreciation Cash $ 6,000 Receivables 9,000 Building Land 113,000 239,000 $ 367,000 56,500 100,000 $ 156,500 Total $ 210,500 Payablen Mortgage $ 12,000 132,000 $ 144,000 $ 12,000 132,000 $ 144,000 Total * The mortgage is attached to the building and land. Ernesto was asking for $493,000 for the company. His tax basis in the BLI stock was $150,000. Included in the sales price was an unrecognized customer list valued at $150,000. The unallocated portion of the purchase price ($120,000) will be recorded as goodwill. Assume Ernesto agrees to sell his stock in BLI to Amy and Brian for $493,000. at amount of gain or loss does Ernesto recognize if the transaction is structured as a stock sale to Amy and Brian?

Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.) Adjusted Tax Basis $ 6,000 9,000 56,500 139,000 PMV Appreciation Cash $ 6,000 Receivables 9,000 Building Land 113,000 239,000 $ 367,000 56,500 100,000 $ 156,500 Total $ 210,500 Payablen Mortgage $ 12,000 132,000 $ 144,000 $ 12,000 132,000 $ 144,000 Total * The mortgage is attached to the building and land. Ernesto was asking for $493,000 for the company. His tax basis in the BLI stock was $150,000. Included in the sales price was an unrecognized customer list valued at $150,000. The unallocated portion of the purchase price ($120,000) will be recorded as goodwill. Assume Ernesto agrees to sell his stock in BLI to Amy and Brian for $493,000. at amount of gain or loss does Ernesto recognize if the transaction is structured as a stock sale to Amy and Brian?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter14: Choice Of Business Entity—operations And Distributions

Section: Chapter Questions

Problem 77EDC

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Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: \table[[,,Adjusted Tax,],[Cash,\table[[FMV],[$10,500
Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Inc. (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: FMV Adjusted Basis AppreciationCash$25,500 $25,500 Receivables 23,200 23,200 Building 133,000 66,500 66,500Land 272,250 90,750 181,500Total$453,950 $205,950 $248,000 Payables$23,000 $23,000 Mortgage* 150,000 150,000 Total$173,000 $173,000 * The mortgage is attached to the building and land. Ernesto was asking for $568,950 for the company. His tax basis in the BLI stock was $148,000. Included in the sales price was an unrecognized customer list valued at $196,000. The unallocated portion of the purchase price ($92,000) will be recorded as goodwill. (Negative amounts should be indicated by a minus sign.)
Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company’s tax accounting balance sheet. The relevant information is summarized as follows: Note: Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign. FMV Adjusted Tax Basis Appreciation Cash $ 10,000 $ 10,000 Receivables 15,000 15,000 Building 100,000 50,000 50,000 Land 225,000 75,000 150,000 Total $ 350,000 $ 150,000 $ 200,000 Payables $ 18,000 $ 18,000 Mortgage* 112,000 112,000 Total $ 130,000 $ 130,000 * The mortgage is attached to the building and land. Ernesto was asking for $400,000 for the company. His tax basis in the BLI stock was $100,000. Included in the sales price was an unrecognized customer list valued at $100,000. The unallocated portion of the purchase price…
Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.) FMV Adjusted Tax Basis Appreciation Cash $ 6,000 $ 6,000 Receivables 9,000 9,000 Building 114,000 57,000 57,000 Land 248,000 78,000 170,000 Total $ 377,000 $ 150,000 $ 227,000 Payables $ 11,000 $ 11,000 Mortgage* 134,000 134,000 Total $ 145,000 $ 145,000 * The mortgage is attached to the building and land. Ernesto was asking for $574,000 for the company. His tax basis in the BLI stock was $190,000. Included in the sales price was an unrecognized customer list valued at $190,000. The unallocated portion of the purchase price…
Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: Note: Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign. Cash Receivables Building Land Total Payables Mortgage Total FMV 12,000 19,000 77,000 165,000 $ 273,000 $ 22,000 87,000 $ 109,000 Adjusted Tax Basin $ 12,000 19,000 38,500 105,000 $ 174,500 Gain or loss recognized Corporate-level tax $ 22,000 87,000 $ 109,000 Appreciation 38,500 60,000 $ 98,500 *The mortgage is attached to the building and land. Ernesto was asking for $402,000 for the company. His tax basis in the BLI stock was $100,000. Included in the sales price was an unrecognized customer list valued at $100,000. The unallocated portion of the purchase price ($138,000)…
Ashvin
Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Inc. (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: FMV Adjusted Basis Appreciation Cash $ 14,500 $ 14,500 Receivables 18,800 18,800 Building 102,500 51,250 51,250 Land 260,250 86,750 173,500 Total $ 396,050 $ 171,300 $ 224,750 Payables $ 19,100 $ 19,100 Mortgage* 159,000 159,000 Total $ 178,100 $ 178,100 * The mortgage is attached to the building and land. Ernesto was asking for $445,700 for the company. His tax basis in the BLI stock was…
Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Inc. (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: FMV Adjusted Basis Appreciation Cash $ 14,500 $ 14,500 Receivables 18,800 18,800 Building 102,500 51,250 51,250 Land 260,250 86,750 173,500 Total $ 396,050 $ 171,300 $ 224,750 Payables $ 19,100 $ 19,100 Mortgage* 159,000 159,000 Total $ 178,100 $ 178,100 * The mortgage is attached to the building and land. Ernesto was asking for $445,700 for the company. His tax basis in the BLI stock was…
Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: Cash Receivables Building Land Total Payables Mortgage Total FMV $ 28,500 20,400 127,000 233,250 $ 409,150 Gain or loss recognized $ 24,200 174,800 Adjusted Tax Basis $ 26,500 20,400 63,500 77,750 $190,150 $ 24,200 174,800 $ 199,000 $ 199,000 Appreciation 63,500 155,500 $ 219,000 *The mortgage is attached to the building and land. Ernesto was asking for $496,950 for the company. His tax basis in the BLI stock was $146.000. Included in the sales price was an unrecognized customer list valued at $189,000. The unallocated portion of the purchase price ($97,800) will be recorded as goodwill. Note: Negative amounts should be indicated by a minus sign. Problem 19-57 Part b (Algo) b. What…
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Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: 24,200 Adjusted Tax Basis $ 24,000 Appreciation Cash FMV $ 24,000 Receivables 24,200 Building 112,000 56,000 56,000 Land 238,500 79,500 159,000 Total $ 398,700 $ 183,700 $ 215,000 Payables Mortgage* $ 25,600 128,300 $ 25,600 128,300 Total $ 153,900 $ 153,900 *The mortgage is attached to the building and land. Ernesto was asking for $504,100 for the company. His tax basis in the BLI stock was $144,000. Included in the sales price was an unrecognized customer list valued at $183,000. The unallocated portion of the purchase price ($76,300) will be recorded as goodwill. Note: Negative amounts should be indicated by a minus sign. a. What amount of gain or loss does BLI recognize if the…
Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Inc. (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: FMV Adjusted Basis Appreciation Cash $ 16,000 $ 16,000 Receivables 17,500 17,500 Building 102,000 51,000 51,000 Land 249,000 83,000 166,000 Total $ 384,500 $ 167,500 $ 217,000 Payables $ 24,300 $ 24,300 Mortgage* 110,250 110,250 Total $ 134,550 $ 134,550 * The mortgage is attached to the building and land. Ernesto was asking for $482,700 for the company. His tax basis in the BLI stock was $192,000. Included in the sales price was an unrecognized customer list valued at $132,000. The unallocated portion of the purchase price ($100,750) will be recorded as…