Maria and Bob form Robin Corporation. Maria transfers property worth $420,000 with a basis of $150,000 for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $165,000 with a basis of $30,000 and legal services worth $15,000 in organizing the corporation. If there is no gain or loss, enter "0" for the amount. a. What gain or income, if any, will the parties recognize on the transfer? María recognizes no gain or loss Feedback of $ .Bob recognizes ordinary income ✓ of $ ▼Check My Work Section 351 is mandatory if a transaction satisfies the provision's requirements. The three requirements for nonrecognition of gain or loss under $ 351 are that (1) property is transferred (2) in exchange for stock and (3) the property transferors are in control of the corporation after the exchange. b. What basis do María and Bob have in the Robin Corporation stock? Maria has a basis of $ Feedback ▼ Check My Work Incorrect , and Bob has a basis of $ 420,000 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 $ in the property María transferred and a basis of $ in the property Bob transferred.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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María and Bob form Robin Corporation. María transfers property worth $420,000 with a basis of $150,000 for 70 shares in Robin
Corporation. Bob receives 30 shares for property worth $165,000 with a basis of $30,000 and legal services worth $15,000 in organizing
the corporation.
If there is no gain or loss, enter "0" for the amount.
a. What gain or income, if any, will the parties recognize on the transfer?
María recognizes no gain or loss
Feedback
of $
Bob recognizes ordinary income
of $
Check My Work
Section 351 is mandatory if a transaction satisfies the provision's requirements. The three requirements for nonrecognition of gain or loss under §
351 are that (1) property is transferred (2) in exchange for stock and (3) the property transferors are in control of the corporation after the
exchange.
b. What basis do María and Bob have in the Robin Corporation stock?
María has a basis of $
Feedback
Check My Work
Incorrect
, and Bob has a basis of $
420,000 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
in the property María transferred and a basis of $
in the property Bob
transferred.
Transcribed Image Text:María and Bob form Robin Corporation. María transfers property worth $420,000 with a basis of $150,000 for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $165,000 with a basis of $30,000 and legal services worth $15,000 in organizing the corporation. If there is no gain or loss, enter "0" for the amount. a. What gain or income, if any, will the parties recognize on the transfer? María recognizes no gain or loss Feedback of $ Bob recognizes ordinary income of $ Check My Work Section 351 is mandatory if a transaction satisfies the provision's requirements. The three requirements for nonrecognition of gain or loss under § 351 are that (1) property is transferred (2) in exchange for stock and (3) the property transferors are in control of the corporation after the exchange. b. What basis do María and Bob have in the Robin Corporation stock? María has a basis of $ Feedback Check My Work Incorrect , and Bob has a basis of $ 420,000 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 in the property María transferred and a basis of $ in the property Bob transferred.
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