Bob and Bill form Star Corporation with the follow investments. Bob transfers machinery (basis of $36 and fair market value of $74,000) and Bill transfers (basis of $19,000 and fair market value of $52,000) services rendered (worth $22,000) in organizing th corporation. Each is issued 25 shares in Star Corpo With respect to the transfers:
Bob and Bill form Star Corporation with the follow investments. Bob transfers machinery (basis of $36 and fair market value of $74,000) and Bill transfers (basis of $19,000 and fair market value of $52,000) services rendered (worth $22,000) in organizing th corporation. Each is issued 25 shares in Star Corpo With respect to the transfers:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:Bob and Bill form Star Corporation with the following
investments. Bob transfers machinery (basis of $36,000
and fair market value of $74,000) and Bill transfers land
(basis of $19,000 and fair market value of $52,000) and
services rendered (worth $22,000) in organizing the
corporation. Each is issued 25 shares in Star Corporation.
With respect to the transfers:
Bill has a basis of $41,000 in the 25 shares he acquires in Star Corporation.
Star Corporation has a basis of $41,000 in the land transferred by Bill.
Bob has no recognized gain; Bill recognizes income/gain of $55,000.
Neither Bob nor Bill has recognized gain or income on the transfers.
None of these.
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