Celeste transferred 100 percent of her stock in Supply Chain Company to Marketing Corporation in a Type A merger. In exchange, she received stock in Marketing with a fair market value of $632,500 plus $632,500 in cash. Celeste's tax basis in the Supply Chain stock was $1,425,000. What amount of loss does Celeste recognize in the exchange and what is her basis in the Marketing stock she receives?

Celeste transferred 100 percent of her stock in Supply Chain Company to Marketing Corporation in a Type A merger. In exchange, she received stock in Marketing with a fair market value of $632,500 plus $632,500 in cash. Celeste's tax basis in the Supply Chain stock was $1,425,000. What amount of loss does Celeste recognize in the exchange and what is her basis in the Marketing stock she receives?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Simone transferred 100 percent of her stock in Purple Company to Plum Corporation in a Type A merger. In exchange, she received stock in Plum with a fair market value of $670,000 plus $670,000 in cash. Simone's tax basis in the Purple stock was $220,00O. What amount of gain does Simone recognize in the exchange and what is her basis in the Plum stock she receives? Multiple Choice $1,120,000 gain recognized and a basis in Plum stock of $1,340,000. $1,120,000 gain recognized and a basis in Plum stock of $670,000. $670,000 gain recognized and a basis in Plum stock of $670,000. $670,000 gain recognized and a basis in Plum stock of $220,000.
C Corporation converts to S Corporation when the fair market value of its assets was $100,000 and its basis of those assets was $60,000. Three years later, S Corporation sells those assets for $120,000. What is the total gain recognized when S Corporation sells those assets for $120,000?
Anne has 5,500 shares of Sony stock that have an adjusted basis of $35,750. She sold the 5,500 shares of stock for cash of $16,500, and she also received a piece of land as part of the proceeds. The land was valued at $22,500 and had an adjusted basis to the buyer of $13,500. What is Anne's gain or loss on the sale of 5,500 shares of Sony stock?
Alabama Corporation, an S corporation, liquidates this year by distributing a parcel of land to its sole shareholder, Mark Ingram. The fair market value of the parcel is $58,500, and its tax basis is $36,000. Mark's basis in his stock is $29,500. d. Assume the fair market value of the land is $25,000 rather than $58,500. How much gain must Mark recognize (if any) as a result of the distribution, and what is his basis in the land? Land Basis
Individual E owns equipment that originally cost $60,000 and has an undepreciated capital cost of $40,000. E sells the equipment to a corporation for its market value of $50,000. To avoid tax on the transfer a section 85 election is filed by E and the corporation. What is the appropriate section 85 elected transfer price?
Yvonne and Simon form Ion Corporation. Yvonne transfers equipment (basis of $226,400 and fair market value of $339,600). Simon invests $271,680 of cash. They each receive 100 shares in Ion Corporation, worth $271,680, but Yvonne also receives $67,920 in cash from Ion. Calculate Ion Corporation's basis in the equipment and determine Yvonne and Simon's basis in the Ion stock. Ion Corporation has a basis of $fill in the blank 1 __________? in the equipment. Yvonne has a basis of $fill in the blank 2_________? for her stock and Simon has a basis of $fill in the blank 3_________? for his stock.
Danielle, a sole proprietor, was engaged in a service business and reported her income on a cash basis. Later, she incorporates her business and transfers the assets of the business to the corporation in return for all the stock in the corporation plus the corporation's assumption of the liabilities of her proprietorship. All the receivables and the unpaid trade payables are transferred to the newly formed corporation. The assets of the proprietorship had a basis of $105,000 and fair market value of $300,000. The trade accounts payable totaled $25,000. There was a note payable to the bank in the amount of $95,000 that the corporation assumes. The note was issued for the purchase of computers and other business equipment. a.Danielle has a basis of $10,000 in the stock she receives. b.The basis of the assets to the corporation is $300,000. c.Danielle has a zero basis in the stock she receives. d.Danielle has a gain on the transfer of $15,000.
Sue has 5,250 shares of Sony stock that have an adjusted basis of $31,500. She sold the 5,250 shares of stock for cash of $13,125, and she also received a piece of land as part of the proceeds. The land was valued at $21,250 and had an adjusted basis to the buyer of $12,750. What is Sue's gain or loss on the sale of 5,250 shares of Sony stock? Sue's gain?
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 property transferred. 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