Casey transfers property with a tax basis of $2,840 and a fair market value of $6,600 to a corporation in exchange for stock with a fair market value of$4,800 and $450 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $1,350 on the propertytransferred. Casey also incurred selling expenses of $372. What is the amount realized by Casey in the exchange?Multiple Choice$6,600$6,228$6,128$5,678

Formula: Amount realized by casey = Fair market value of stock + Cash + Assumed liability - Selling…

Answered: Casey transfers property with a tax…

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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Betty contributed to Alpha Beta Corporation a building with an adjusted basis to Betty of $50,000 and a fair market value of $150,000 that was subject to a mortgage of $120,000 in exchange for 50 percent of the voting common stock (the only class of stock) of the Alpha Beta Corporation. The Alpha Beta Corporation will assume the mortgage on the building. As part of the same transaction, Alfie contributed to Alpha Beta Corporation cash of $30,000 in exchange for the other 50 percent of the voting common stock of Alpha Beta Corporation. How much gain or loss, if any, does Betty recognize with respect to this transaction? a. $0. b. $10,000. c. $70,000. d. $100,000.
Lance contributed investment property worth $690,000, purchased two years ago for $277,500 cash, to Cloud Peak LLC in exchange for an 85 percent profits and capital interest in the LLC. Cloud Peak owes $505,000 to its suppliers but has no other liabilities. a. What is Lance's tax basis in his LLC interest? Tax basis
Lake Life, Inc., a C corporation, owns a single asset with a basis of $250,000 and a fair market value of $500,000. Lake Life elects S corporation status. Lake Life holds a positive E & P balance. The entity elects S corporation status for 2019 and then sells the asset. What are the corporate-level built-in gains taxes that must be paid by Lake Life? Answer: $____________
Hank transfers property (basis of $255,430 and fair market value of $452,350) to Minerals Corporation in exchange for § 1244 stock. The transfer qualifies as a nontaxable exchange under § 351. In the current year, Hank sells the Minerals stock for $132,560. Assume Hank files a joint return with his wife, Marie. With respect to the sale, Hank has: Question options: A. An ordinary loss of $122,870. B. An ordinary loss of $100,000 and a capital loss of $219,790. C. A capital loss of $122,870. D. An ordinary loss of $100,000 and a capital loss of $22,870. E. None of these.
Kesha, a sole proprietor, is engaged in a cash basis service business. In the current year, she incorporates the business to form Kiwi Corporation. She transfers assets with a basis of $500,000 (fair market value of $1,200,000), a bank loan of $450,000 (which Kiwi assumes), and $80,000 in trade payables in return for all of Kiwi’s stock. What are the tax consequences of the incorporation of the business?
Rock Corporation distributed property with a fair market value of $100,000 and an adjusted basis of $70,000 to Ann, a shareholder of Rock Corporation. Prior to the distribution, Rock Corporation had a deficit in accumulated earnings and profits of $200,000 and current earnings and profits of $20,000. Ann has stock basis in Rock Corporations of $90,000. Assume that Ann is an individual in the 37% tax bracket. Determine Ann’s tax liability for this distribution.
Joe sold his coin collection for proceeds of $1,200. The collection had a ACB of $500. What must Joe claim as a taxable capital gain on this disposition? a) $100 b) $200 c) $700 d) $1,000
Casey transfers property with a tax basis of $2,180 and a fair market value of $6,100 to a corporation in exchange for stock with a fair market value of $4,500 and $575 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $1,025 on the property transferred. Casey also incurred selling expenses of $391. What is the amount realized by Casey in the exchange?
Jennifer transferred land with an adjusted basis of $15,000 and a fair market value of $25,000 to ABC Corporation in return for all of its stock. Jennifer also received a $1,000 short-term note (boot). Please calculate the following for Jennifer. You must show your all of your work. 1) Her realized gain 2) Her recognized gain 3) Her basis in the stock 4) Her basis in the note
Antoine transfers property with a tax basis of $524 and a fair market value of $647 to a corporation in exchange for stock with a fair market value of $569 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $78 on the property transferred. What is Antoine's tax basis in the stock received in the exchange? Multiple Choice O $647 O $524 $569 O$446.
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Your client has made previous lifetime gifts that have fully exhausted his applicable credit amount. He has asked you to advise him about the tax consequences of transferring his closely held business, valued at $350,000, to his daughter in exchange for a lump sum payment of $300,000. You should inform him that the most important tax implication of this intrafamily business transfer is that A) he will be making a taxable gift of $50,000, because the value of the transferred business exceeds the lump sum payment of $300,000. B) he will be making a taxable gift of $350,000, because the Chapter 14 rules require his retained interest to be valued at zero. C) he will have to include $50,000 minus one annual exclusion in adjusted taxable gifts in his estate tax calculation as an adjusted taxable gift. D) none of the above.

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