Problem 12-23 (LO. 2, 3, 4)Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of$375,000. One month prior to incorporating Broadbill, Allie borrows $100,000 for personal reasons and gives the lender a second mortgageon the land. Broadbill Corporation issues stock worth $300,000 to Allie and assumes the mortgages on the land.If an amount is zero, enter "0".a. What are the tax consequences to Allie and to Broadbill Corporation?SinceAllie has a realized gain of $has a basis of $in the land and Allie has a $of which $basis in the stock.is recognized. Broadbill Corporation

Realized gain is the profit generated from the sale or disposition of an asset when the selling…

dbill Corporation issues stock worth $300,000 to Allie and assumes the mortgages on zero, enter "0". tax consequences to Allie and to Broadbill Corporation? Allie has a realized gain of $ Allie ba of which $ hasis in the stock. is

dbill Corporation issues stock worth $300,000 to Allie and assumes the mortgages on zero, enter "0". tax consequences to Allie and to Broadbill Corporation? Allie has a realized gain of $ Allie ba of which $ hasis in the stock. is

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter18: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 34P

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Question

Problem 12-23 (LO. 2, 3, 4)
Allie forms Broadbill Corporation by transferring land (basis of $125,000, fair market value of $775,000), which is subject to a mortgage of
$375,000. One month prior to incorporating Broadbill, Allie borrows $100,000 for personal reasons and gives the lender a second mortgage
on the land. Broadbill Corporation issues stock worth $300,000 to Allie and assumes the mortgages on the land.
If an amount is zero, enter "0".
a. What are the tax consequences to Allie and to Broadbill Corporation?
Since
Allie has a realized gain of $
has a basis of $
in the land and Allie has a $
of which $
basis in the stock.
is recognized. Broadbill Corporation

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See Attached. 12
Mary transfers a building (adjusted basis of $15,000 and fair market value of $90,000) to White Corporation. In return, Mary receives 80% of White Corporation's stock (worth $65,000) and an automobile (fair market value of $5,000). In addition, there is an outstanding mortgage of $20,000 (taken out 15 years ago) on the building, which White Corporation assumes. With respect to this transaction: Question 23 options: Mary has no recognized gain. Mary's recognized gain is $5,000. Mary's recognized gain is $10,000 White Corporation's basis in the building is $15,000 None of the above.
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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
Question. 15
See Attached. 5
6.Matthew and Venice decide to form their new retail business as an LLC. Each will receive an equal profits (loss) interest by contributing cash, property, or both. In addition to the members' contributions, their LLC will obtain a $35,000 nonrecourse loan from Simple Bank at the time it is formed. Matthew contributes cash of $4,000 and a building he bought as a storefront for the retail. The building has an FMV of $65,000 and an adjusted basis of $29,000 and is secured by a $34,000 nonrecourse mortgage that the LLC will assume. What is Matthew's outside tax basis in his LLC interest? Show computation.
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