Determine the amount of income, gain or loss (if any) that Elaine has from this transaction. Elaine, James, and Jeremy form Forest Corporation by transferring the following items to thecorporation:Items transferredBasisFair Market ValueNumber of SharesIssuedFrom Elaine:CashEquipment$60,00030,000$60,000340,000200 sharesFrom James:LandMortgage100,000140,000200 shares540,000140,000From Jeremy:Office equipment50,000260,000*100 sharesBesides the receiving 100 shares of stock, Jeremy also received $60,000 of cash. ForestCorporation assumed the mortgage transferred by James.

ANSWER General Rule under sec 351(a) : No gain or lossshall be recognized if the property is…

Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the corporation: Items transferred Basis Fair Market Value Number of Shares Issued From Elaine: $60,000 30,000 $60,000 340,000 Cash 200 shares Equipment From James: Land 100,000 140,000 540,000 140,000 200 shares Mortgage From Jeremy: Office equipment 50,000 260,000* 100 shares Besides the receiving 100 shares of stock, Jeremy also received $60,000 of cash. Forest Corporation assumed the mortgage transferred by James.

Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the corporation: Items transferred Basis Fair Market Value Number of Shares Issued From Elaine: $60,000 30,000 $60,000 340,000 Cash 200 shares Equipment From James: Land 100,000 140,000 540,000 140,000 200 shares Mortgage From Jeremy: Office equipment 50,000 260,000* 100 shares Besides the receiving 100 shares of stock, Jeremy also received $60,000 of cash. Forest Corporation assumed the mortgage transferred by James.

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

So for #7. What amount should Jasmine report for other income?
Which of the following categories represent Deductions for AGI
Why are these long-term assets important to the success of your employer or your future business?
Which of the following is a deductible expense for an individual taxpayer? A) Rent payments for personal use B) Mortgage interest on a vacation home C) Childcare expenses while working D) Personal clothing purchases
Explain why you would prefer to have an expense labeled as an adjustment to income instead of being labeled as a deduction. List two types of individuals who are most likely to take itemized deductions. Be specific.
What do you believe led to the conclusion that a sole proprietorship should report its results on the owner’s tax return?
Can you explain the choices an executor of an estate has in determining the values of assets included in the estate for tax purposes.
How are medical expenses, mortgage interest, casualty losses used when it comes to filing a tax report? Any examples?
Explain two income tax credits available to your client to reduce their income tax liability.
Explain and account for the distinction between principal and income in the context of estate and trust accounting.
What is the charitable contributions?
What is Marc and Mikkel's taxable income? What is Marc and Mikkel's taxes payable or refund due for the year?