Harry, Hermione, and Ron formed an S corporation called Bumblebore. Harry and Hermione both contributed cash of $34,300 to things started. Ron was a bit short on cash but had a parcel of land valued at $84,600 (basis of $68,600) that he decided to contri The land was encumbered by a $50,300 mortgage. What tax bases will each of the three have in his or her stock of Bumblebore? Tax Basis Harry Hermione

Harry, Hermione, and Ron formed an S corporation called Bumblebore. Harry and Hermione both contributed cash of $34,300 to things started. Ron was a bit short on cash but had a parcel of land valued at $84,600 (basis of $68,600) that he decided to contri The land was encumbered by a $50,300 mortgage. What tax bases will each of the three have in his or her stock of Bumblebore? Tax Basis Harry Hermione

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

Lily and Mary owed Jake P500,000.00 for advancing their equity in a corporation they joined as incorporators. Lily and Mary bound themselves solidarily liable for the debt. Later, Lily and Jake became sweethearts so Jake condoned the debt of P500,000.00. May Lily demand from Mary P250,000.00 as her share in the debt? Explain.
LO.3 Vella owns and operates an illegal gambling establishment. In connection with this activity, he has the following expenses during the year: Rent $ ‍24,000Bribes 40,000Travel expenses 4,000Utilities 18,000Wages 230,000Payroll taxes 13,800Property insurance 1,600Illegal kickbacks 22,000What are Vella’s total deductible expenses for tax purposes?
Sam and Sung are equal joint owners in a property which they rent out. Because Sam is unemployed, he spends more time at the property to help do maintenance and gardening. Because Sung earns $200,000 per year from his job as an accountant, they come to a private agreement to divide the annual rent of received from their tenants, as follows: Sam will receive a salary payment of $20,000, after which the remainder will be split 60% in favour of Sam and 40% in favour of SungDuring the 2020 tax year, they incurred the following expenses on the property which they hope to claim as deductions: Council rates: $3,000Land Tax: $12,000Bank interest on the loan taken out to finance the purchase of the property: $80,000Required: If the total rent received for the 2020 tax year was $177979 calculate Sam's Assessable Income (assuming he has no other income sources).
Pepa Madrigal has operated a very successful bakery for 30 years, and has accumulated investment that earn annual interest income of $40,000. Her other income put her in the top income tax bracket for personal tax purposes. She has a son, Antonio who is 22 years old and currently has no income. Antonio's only personal tax credit is the personal tax credit. Determine the amount of federal income taxes that could be saved by transferring the interest earning investments to a trust with Antonio as the income beneficiary, assuming that the trust will be required to distribute all of its income each year.
The severson family owns a house worth $280,000, of which they still owe $113,545 on the mortgage. They also own two cars, one worth $5,200 and the other worth $15,600. They still owe $9,200 on one of the car loans. They have $2,300 in credit card debt and owe $18,200 for their daughter’s wedding. What is their net worth? A $157,555 B $162,155 C $143,245 D $300,800
Diana sold mutual fund shares she had owned 4 years so that she could use the proceeds to travel across Europe with her son. Diana is in the 35% marginal tax bracket and her capital gains from this sale were $62,950. How much tax would Diana owe on those gains? (Report an integer)
Diana sold mutual fund shares she had owned 4 years so that she could use the proceeds to travel across Europe with her son. Diana is in the 35% marginal tax bracket and her capital gains from this sale were $24,230. How much tax would Diana owe on those gains? (Report an integer)
Charlene owns a 70 percent interest in Maupin Mopeds, which is organizedas a partnership. She wants to open another business and needs office spacefor it. She has Maupin distribute a building worth $150,000 to her in lieu of her normal cash distribution. Maupin’s basis in the building is $55,000. Charlene’s basis in Maupin is $80,000. identify the tax issue(s) posed by the facts presented.Determine the possible tax consequences of each issue that you identify.
Harry, Hermione, and Ron formed an S corporation called Bumblebore. Harry and Hermione both contributed cash of $36,700 to get things started. Ron was a bit short on cash but had a parcel of land valued at $85,700 (basis of $73,400) that he decided to contribute. The land was encumbered by a $49,000 mortgage. What tax bases will each of the three have in his or her stock of Bumblebore?
Mickey, Mickayla, and Taylor are starting a new business (MMT). To get the business started, Mickey is contributing $215,000 for a 40 percent ownership interest, Mickayla is contributing a building with a value of $215,000 and a tax basis of $153,750 for a 40 percent ownership interest, and Taylor is contributing legal services for a 20 percent ownership interest. What amount of gain is each owner required to recognize under each of the following alternative situations? [Hint: Look at IRC §351 and §721.] A. MMT is formed as a C corporation. B. MMT is formed as an S corporation. C. MMT is formed as an LLC.
What Constitutes Income (LO. 1) Two Sisters is a partnership that owns and operates a farm. During the current year, the partnership raised and harvested hay at a cost of $20,000. It then traded half the hay for quarter horse breeding stock-young horses worth $30,000. Two Sisters fed the remainder of the hay to the horses, which were worth $50,000 at the end of the year. a. What is the tax consequence of the exchange? A of $ b. What amount can they deduct as current operating expenses from these transactions during the current year?: c. What is the basis of the horses at year-end? d. The partnership has income of $ from these transactions during the current year.