María and Bob form Robin Corporation. María transfers property worth $420,000 (basis of $150,000) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $15,000 (basis of $3,000) and for legal services (worth $165,000) in organizing the corporation. a. What gain or income, if any, will the parties recognize on the transfer? María recognizes no gain or loss X of $ a gift X of: 165,000 ✓ b. What basis do María María has a basis of $ 0 X and Bob recognizes a gain and Bob have in the Robin Corporation stock? 150,000 X, while Bob has a basis of $ ✔ of $ 45,000 X in the stock. c. What is Robin Corporation's basis in the property and services it received from María and Bob? Robin Corporation has a basis of $ Bob transferred. 150,000 X in the property María transferred and a basis of $ 15,000 X and has 30,000 X in the property
María and Bob form Robin Corporation. María transfers property worth $420,000 (basis of $150,000) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $15,000 (basis of $3,000) and for legal services (worth $165,000) in organizing the corporation. a. What gain or income, if any, will the parties recognize on the transfer? María recognizes no gain or loss X of $ a gift X of: 165,000 ✓ b. What basis do María María has a basis of $ 0 X and Bob recognizes a gain and Bob have in the Robin Corporation stock? 150,000 X, while Bob has a basis of $ ✔ of $ 45,000 X in the stock. c. What is Robin Corporation's basis in the property and services it received from María and Bob? Robin Corporation has a basis of $ Bob transferred. 150,000 X in the property María transferred and a basis of $ 15,000 X and has 30,000 X in the property
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![María and Bob form Robin Corporation. María transfers property worth $420,000 (basis of $150,000) for 70 shares in Robin Corporation.
Bob receives 30 shares for property worth $15,000 (basis of $3,000) and for legal services (worth $165,000) in organizing the corporation.
a. What gain or income, if any, will the parties recognize on the transfer?
María recognizes no gain or loss
X of $
a gift
X of $
165,000 ✓.
b. What basis do María
María has a basis of $
0 X and Bob recognizes a gain
and Bob have in the Robin Corporation stock?
150,000 X, while Bob has a basis of $
45,000 X in the stock.
✓of $
c. What is Robin Corporation's basis in the property and services it received from María and Bob?
Robin Corporation has a basis of $
Bob transferred.
150,000 X in the property María transferred and a basis of $
15,000 X and has
30,000 X in the property](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4f1ad8cd-79a4-4259-96a6-1ecf688cef1d%2Fbe42fa0d-1618-4e47-b752-8fb7ffc88ead%2F6lokm08_processed.jpeg&w=3840&q=75)
Transcribed Image Text:María and Bob form Robin Corporation. María transfers property worth $420,000 (basis of $150,000) for 70 shares in Robin Corporation.
Bob receives 30 shares for property worth $15,000 (basis of $3,000) and for legal services (worth $165,000) in organizing the corporation.
a. What gain or income, if any, will the parties recognize on the transfer?
María recognizes no gain or loss
X of $
a gift
X of $
165,000 ✓.
b. What basis do María
María has a basis of $
0 X and Bob recognizes a gain
and Bob have in the Robin Corporation stock?
150,000 X, while Bob has a basis of $
45,000 X in the stock.
✓of $
c. What is Robin Corporation's basis in the property and services it received from María and Bob?
Robin Corporation has a basis of $
Bob transferred.
150,000 X in the property María transferred and a basis of $
15,000 X and has
30,000 X in the property
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