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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Bobert transfers a rental office building (current fair market value of $45,000) that he purchased 20 years ago for $60,000. Its current basis is $15,000 after recognition of $45,000 in depreciation expense.The corporation assumes the $20,000 balance on the original mortgage and Bobert receives 25 shares of stock from the corporation in the exchange. How much gain does Bobert recognize? Show work
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 $
Greta had the following transaction in 2021: a. Carl sold a building in 2021 and generated a $3,000 unrecaptured 1250 gain and a $6,000 LT capital gain. b. Carl sold some old postage stamps he had been collecting since he was a kid at a gain of $5,000. c. Stock purchased on 4/15/21 for $4,000 and sold 11/2/21 for $1,000. d. He sold a potato washing machine that he had used in his business for an ordinary loss of $2,000 e. He sold a personal auto for a long-term loss of $1,000. f. He sold bonds that he purchased back in 2018 for a loss of $10,000. What is the net capital gain or loss and its character?
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?
Russell Corporation sold a parcel of land valued at $400,000. Its basis in the land was $275,000. For the land, Russell received $50,000 in cash in yar 0 and a note providing that Russell will receive $175,000 in year 1 and $175,000 in yar 2 from the buyer. What is Russell’s realized gain on the transaction? What is Russell’s realized gain in year 0, year 1, and year 2?
Bob sold 100 shares of ABC stock for $2,100 and 300 shares of XYZ stock for $8,900. He purchased the ABC stock four years ago for $1,200 and the XYZ stock two years ago for $9,100. What is the net effect of these sales on Bob’s income? a. $200 net gain b. $700 net gain c. $900 net gain d. $1,100 net gain
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Emma and Liam form Majestic Corporation. Emma transfers equipment worth $475,000 (basis of $100,000) and cash of $25,000 to Majestic Corporation for 50% of its stock. Liam transfers a building and land worth $525,000 (basis of $200,000) for 50% of Majestic's stock and $25,000 cash. Discuss the result of these transfers. (a) Emma recognizes a gain of $375,000; Liam recognizes a gain of $325,000. (b) Emma recognizes a gain of $25,000; Liam recognizes no gain. (c) Neither Emma nor Liam recognizes gain. (d) Emma recognizes no gain; Liam recognizes a gain of $25,000. (e) None of the above

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