Determine the proportionate interest of Mr. Aldrin. b) If Aldrin exercises his rights, what will be his proportionate interest
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Mr. Aldrin owns 15,000 shares of INC , Inc. which has a 40,000 shares outstanding and 60,000 shares of authorized capital stock. INC issues additional shares of 10,000 capital stocks giving the shareholders the pre-emptive right to subscribe .
a) Determine the proportionate interest of Mr. Aldrin.
b) If Aldrin exercises his rights, what will be his proportionate interest ?
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- Tom is talking to his friend Bob, who has an interest in Freedom, LLC, about purchasing his LLC interest. Bob's outside basis in Freedom, LLC is $8,500. This includes his $2,200 one-fourth share of the LLC's debt. Bob's 704(b) capital account is $15,500. If Tom bought Bob's LLC interest for $14,000, what would Tom's outside basis be in Freedom, LLC?Determine the basis of stock in the hands of the shareholder, the basis to the corporation of the contributed property, and the gain, if any, to the shareholder in each of the follow independent cases. In all cases, assume that the 80% test is met. a. Pierre contributes a vehicle with a FMV of $ 6,000.00 and basis of $ 8,000.00. b. Marcus contributes land with a FMV of $ 500,000.00, basis of $ 300,000.00, and debt of $ 250,000.00. c. Same as b. Except Marcus also receives cash of $ 25,000.00. d. Patricia contributes an apartment building with a FMV of $ 200,000, basis of $ 50,000.00, and debt of $ 125,000.00The Board of Directors of CYZ Corporation votes to issue two shares of stock for each share held as a stock dividend to shareholders. Just prior to the dividend, Cheryl owns 100 shares of CYZ Corporation stock that she purchased for $10 per share. She receives 200 new shares as a result of the dividend. How much gross income must Cheryl report as a result of the dividend and what is her stock basis after the dividend?
- G is employed by a Canadian-controlled private corporation. In year 1, G was granted a stock option to acquire 4,000 shares from the treasury of his employer’s corporation for $11 a share. At the time of receiving the option, the shares were valued at $13 per share. In year 3, G exercised his option and purchased 4,000 shares for $44,000. At the purchase date in year 3, the shares were valued at $12 per share. In year 5, G sold 4,000 shares for $17 per share. What amount is included in G’s employment income for tax purposes in year 1?V1.Chandra was the sole shareholder of Pet Emporium, which was originally formed as an S corporation. When Pet Emporium terminated its S election on August 31, 2021, Chandra had a stock basis and an at-risk amount of $0. Chandra also had a suspended loss from Pet Emporium of $9,600. What amount of the suspended loss is Chandra allowed to deduct, and what is her basis in her Pet Emporium stock, at the end of the post-termination transition period under the following alternative scenarios (assume Pet Emporium files for an extension to file its tax returns)? Note: Leave no answer blank. Enter zero if applicable. a. Chandra makes capital contributions of $7,900 on August 30, 2022, and $4,720 on September 14, 2022.
- A, an individual, is an architect and general contractor. B is a wealthy individual. Newco's Certificate of Incorporation states that it is authorized to issue 200 shares, no par value of common stock. B transfers S500,000 of cash to Newco in exchange for 50 shares of Newco's stock. A signs a contract with Newco in which A will perform services designing a housing project and then acting as general contractor on the construction of that housing project. In exchange, A will receive 50 shares of Newco's stock. 1b) Suppose instead that A and Newco do not enter into a written contract. A transfers $500 in cash for 50 shares of Newco's stock while B transfers $500,000 for 50 shares of Newco's stock. A then performs the architectural and contracting services for no further charge. Would this change your answer?Derek has shares of UltFrisCorp that he would like to transfer, using Section 85, to a holding company that he has recently setup. The ACB and PUC of his UltFrisCorp shares are $30,000. The fair market value of the shares are $1 million. Derek also has $450,000 in his lifetime capital gains exemption that he would like to use as part of this transfer. What is the elected amount that Derek should chose in order to use his lifetime capital gains exemption, and avoid paying tax on the transfer. 1,000,000 30,000 480,000 450,000A shareholder sells public securities to a corporation, and files a section 85 election to have a transfer/sale price of $60,000. The fair market value (FMV) and adjusted cost base (ACB) of the securities are $220,000 and $60,000 respectively. As consideration for the transfer, the corporation issues a $50,000 note, preference shares worth $150,000 and common shares worth $20,000. What are the tax costs of the various assets to the shareholder? The note - $50,000, the preference shares - $nil, and the common shares $10,000. The note - $50,000, the preference shares - $132,353 ($150,000/$170,000 total share value issued), and the common shares $37,647 ($2,000/$170,000 total share value issued). The note - $60,000, the preference shares - $150,000, and the common shares $10,000. The note - $50,000, the preference shares - $10,000, and the common shares $nil.
- Give me correct answer with explanation.h9. Luke owns 100 shares of common stock in Neon Corporation purchased several years ago for $6,000. In the current year Luke received a nontaxable distribution of stock rights to purchase 40 additional shares of stock in Neon Corporation for $10 each. On the date of the distribution the FMV of the common stock was $90 per share and the FMV of the stock rights was $3.000, What is Luke's basis in the stock rights? a. $ 0 b. $3,000 C. $1,500 d. $4,500 e. None of the answers provided is correctChris is the 100% shareholder of the Denture Corporation, an S corporation, and has a basis of $10,000 in the stock as of January 1, 2019. Chris also made a $15,000 loan to Denture Corporation as of January 1, 2019. During 2019, Denture Corporation had a $5,000 capital gain, made a $2,000 cash distribution to Chris, and incurred a $20,000 ordinary taxable loss. a) What is Chris’ stock basis at the end of 2019? _____________________ b) What is his loan basis at the end of 2019? ______________________
