I need questions answers accounting Carla transfers land with an FMV of $100,000, basis of $20,000, to acorporation in exchange for 50% of the corporation's stock. The land issubject to a $50,000 liability, which the corporation assumes. Whatamount of gain must Carla recognize as a result of this transaction?a. $0b. $30,000c. $50,000d. $80,000

Step 1: Define Capital GainIf you are holding an asset for more than one year and selling the asset…

Answered: Carla transfers land with an FMV of…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 15MCQ

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1. Bob transfers assets with a $100,000 FMV (basis $60,000) and $70,000 of business-related liabilities to a corporation in exchange for 100% of the corporation's stock with a FMV of $30,000. The corporation assumes the $70,000 mortgage. The transfer qualifies under Sec. 351. What is Bob's gain recognized on the transfer? Group of answer choices $10,000 $40,000 $0 $30,000
Brett and Illain formed a new Corporation by transferring the following assets in exchange for stock:▪ Brett transferred: Property subject to a 70,000 mortgage; FMV $1,000000, Basis 500,000. In exchange, she received 200 shares of Stock and relief of the mortgage liability. ▪ Illain transferred: Inventory with a Basis of 15,000 and FMV 150,000. Required:a. What is Brett’s basis in the stock she received b. What is Brett’s recognized gain/loss
Sarah transfer land with a fair market value of $25,000, to a corporation in exchange for 100 percent of the corporation’s stock. What amount of gain must Sarah recognize as a result of this transaction? $0 $25,000 $100,000 125,000
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
Mai is going to contribute the following assets to a business entity in exchange for an ownership interest. Adjusted Basis FMVCash $100,000 $100,000Land and building 60,000 95,000What are the tax consequences of the contribution to Mai if the business entity is a(n):a. Sole proprietorship? b. General partnership? c. Limited partnership? d. C corporation? e. S corporation?
Sam and Maude (both individuals) form S&M Corporation. Sam contributes cash of $100,000 and Maude contributes property with a basis of $40,000 and a fair market value of $100,000. If Sam and Maude own all of the stock in S&M Corporation immediately after the transfer, what is Maude's recognized gain on the transfer? O a. $0 O b. $50,000 O c. $20,000 O d. $30,000
Henrietta transfers cash of $312,400 and equipment with a fair market value of $93,720 (basis to her as a sole proprietor, $37,488) in exchange for a 40% profit and loss interest worth $406,120. If an amount is zero, enter "0". a. How much are Henrietta's realized and recognized gains?Realized gain: $ ________Recognized gain: $_________ b. What is the amount of Henrietta's basis in her partnership interest?$__________ c. What is the partnership's basis in the contributed equipment? $__________
Question. 15
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Jack and Jill exchange like-kind real estate assets as listed below: Jack's old asset: FMV $50,000; Adjusted Taxable Basis $23,000 Jill's old asset: FMV $70,000; Basis $55,000 If Jack pays Jill cash of $20,000 plus Jack's old asset, how much gain must Jill recognize on this transaction? $5,000 $10,000 $15,000 $20,000
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Father owns 40 % of Family Corporation (FC ) Son owns 30 % of FC and Daughter owns 30 % of FC (Father's 2 children are Son and Daughter) Father wants to retire and have Son and Daughter each own 50 % of FC Son and Daughter do not have enough money to buy Father's shares Father insists that the results of the transaction generate a capital gain for him rather than dividend income (Father has a high basis in FC shares.) You suggest that the FC reddem all of Father's shares of FC Which of the following statements is correct? O A. Because a redemption is the sale of shares to a Corporation, it will alaways result in a capital gain B. II Father becomes Chairman of the Board and President of FC after the redemption, Capital gain treatment will be available if the family attribution rules are waived OC. The redemption of all of Father's shares will result in capital gain treatment because it qualifies as a substantially disproportionate redemption OD. The redemption of all of Father's shares…

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