Please provide this question solution general accounting John, the sole owner of LV Co., transfers equipmentto LV Co. in return for 100 shares of its stock and$10,000. The stock is worth $70,000. John bought themachine several years ago for $60,000 and itsadjusted basis at the time of the transfer was $28,000.John's recognized gain on the transfer is?

Step 1: Calculate the Gain RealizedStep 2: Calculate the Boot ReceivedStep 3: Determine the…

Answered: John, the sole owner of LV Co.,…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter1: The Individual Income Tax Return

Section: Chapter Questions

Problem 19MCQ: Jayne purchased General Motors stock 6 years ago for $20,000. In the current year, she sells the...

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Sam and Maude (both individuals) form S&M Corporation. Sam contributes cash of $100,000 and Maude contributes property with a basis of $40,000 and a fair market value of $100,000. If Sam and Maude own all of the stock in S&M Corporation immediately after the transfer, what is Maude's recognized gain on the transfer? O a. $0 O b. $50,000 O c. $20,000 O d. $30,000
Stephanie owns a machine (adjusted basis of $90,000; the fair market value of $125,000) that she uses in her business. She exchanges it for another machine (worth $100,000) and stock (worth $25,000). a. Stephanie's realized gain is $ ... and recognized gain is $.. b. The basis of the new machine is $. c. The basis in the stock she received is $
John transfers a property (A/B $10,000, FMV $50,000) to Brown Corp. in exchange for 100% of the Brown stock, which is worth $50,000. The property is subject to a liability of $20,000, which Brown assumes. The transfer is for business purpose. The $20,000 liability is also for business purpose. What is John’s recognized gain? What is John’s stock basis in the Brown corporation What is Brown’s basis in the property?
Alfonso sells a passive activity in the current year for $800,000. His adjusted basis in the activity is $200,000, and he uses the installment method of reporting the gain. The activity has suspended losses of $44,000. Alfonso receives $400,000 in the year of sale. a. What is his gross profit ratio on the sale? Enter as a percentage. For example, .35 would be entered as "35".% b. His recognized gain for the current year is $. c. Alfonso can currently deduct $of suspended losses.
Auntie sold some stock she purchased several years ago for $10,000 to Niece for $6,000. I. If this is Auntie's only stock transaction, she can deduct only $3,000 of the loss. II. If Niece sells the stock for $10,000, her taxable gain is $4,000. What is correct?
Lance contributed investment property worth $500,000, purchased three years ago for $200,000 cash, to Cloud Peak LLC in exchange for an 85 percent profits and capital interest in the LLC. Cloud Peak owes $300,000 to its suppliers but has no other debts.a. What is Lance’s tax basis in his LLC interest? b. What is Lance’s holding period in his interest? c. What is Cloud Peak’s basis in the contributed property? d. What is Cloud Peak’s holding period in the contributed property?
Henrietta transfers cash of $312,400 and equipment with a fair market value of $93,720 (basis to her as a sole proprietor, $37,488) in exchange for a 40% profit and loss interest worth $406,120. If an amount is zero, enter "0". a. How much are Henrietta's realized and recognized gains?Realized gain: $ ________Recognized gain: $_________ b. What is the amount of Henrietta's basis in her partnership interest?$__________ c. What is the partnership's basis in the contributed equipment? $__________
1. Joe owns a farm with a basis of $250,000 and a fair market value of $550,000. Willy owns an apartment building with a fair market value of $100,000 and a basis of $300,000. They exchange properties. In addition, Willy gives Joe $450,000 in cash. a. What are Joe's and Willy's realized gain and losses on the transaction? b. What amounts of gain or loss do they recognize on the transaction? c. What is the basis of the property received by Joe? Willy?
Rafael sold an asset to Jamal. What is Rafael's amount realized on the sale in each of the following alternative scenarios? c. Rafael received $23,500 cash, a parcel of land worth $96,500, and marketable securities of $10,40O. Rafael also paid a commission of $9,000 on the transaction. Amount realized
Rafael sold an asset to Jamal. What is Rafael's amount realized on the sale in each of the following alternative scenarios? c. Rafael received $20,000 cash, a parcel of land worth $50,000, and marketable securities of $10,000. Rafael also paid a commission of $8,000 on the transaction.
In the current year, Erin had the following capital gains (losses) from the sale of her investments: $2,900 LTCG, $24,100 STCG, ($9,900) LTCL, and ($15,900) STCL. What is the amount and nature of Erin's capital gains and losses? Multiple Choice $1,200 net short-term capital gain. $1,200 net long-term capital loss. $3,100 net short-term capital gain. $3,100 net long-term capital loss. None of the choices are correct.
Marie and Ramesh form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $126,000 in exchange for 400 shares of stock. Ramesh contributes an installment note receivable (basis $25,000; fair market value $30,000), land (basis $50,000; fair market value $170,000), and inventory (basis $243,200; fair market value $304,000) in exchange for 1,600 shares. Determine Marie and Ramesh's current income, gain, or loss and calculate the basis that each takes in the Roundtree stock. If an amount is zero, enter "0". Marie has income of $fill in the blank 1_______? and $fill in the blank 2________? basis in her 400 shares of stock. Ramesh has incomeof $fill in the blank 3_____? and $fill in the blank 4______? basis in his 1,600 shares of stock.

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