Meghan Markle wants to elect S85(1) and transfer land valued at $45,000 to her corporation. Megan's adjusted cost base is $25,000 The land has a mortgage of $15,000. In return Meghan received cash of $30,000 and a preferred share worth $2,000 and the company assumed the mortgage. What will be the elected transfer price and the adjusted cost base of the preferred share?

Meghan Markle wants to elect S85(1) and transfer land valued at $45,000 to her corporation. Megan's adjusted cost base is $25,000 The land has a mortgage of $15,000. In return Meghan received cash of $30,000 and a preferred share worth $2,000 and the company assumed the mortgage. What will be the elected transfer price and the adjusted cost base of the preferred share?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 29P

See similar textbooks

Similar questions

Ed owns investment land with an adjusted basis of 35,000. Polly has offered to purchase the land from Ed for 175,000 for use in a real estate development. The amount offered by Polly is 10,000 in excess of what Ed perceives as the fair market value of the land. Ed would like to dispose of the land to Polly but does not want to incur the tax liability that would result. He identifies an office building with a fair market value of 175,000 that he would like to acquire. Polly purchases the office building and then exchanges the office building for Eds land. a. Calculate Eds realized and recognized gain on the exchange and his basis for the office building. b. Calculate Pollys realized and recognized gain on the exchange and her basis in the land.
Prepare your answers using excel or clearly written computations. Show your work for maximum points. 2. Jocelyn contributes land with a basis of $60,000 and fair market value of $90,000 and inventory with a basis of $5,000 and fair market value of $8,000 in exchange for 100% of Zion Corporation stock. The land is subject to a $15,000 mortgage. Determine Jocelyn’s recognized gain or loss and the basis in the Zion stock received.
Indigo Corporation wants to transfer cash of $150,000 or property worth $150,000 to one of its shareholders, Linda, in a redemption transaction that will be treated as a qualifying stock redemption. If Indigo distributes property, the corporation will choose between two assets that are each worth $150,000 and are no longer needed in its business: Property A (basis of $75,000) and Property B (basis of $195,000). a. Compute Indigo’s recognized gain or loss if it distributes Property A in redemption of Linda’s shares. b. Compute Indigo’s recognized gain or loss if it distributes Property B in redemption of Linda’s shares. c. Compute Indigo’s recognized gain or loss if it sells Property B to an unrelated party and then distributes the sale proceeds in redemption of Linda’s shares.
Solve it
Hi, can someone help me with this question please?
Mai is going to contribute the following assets to a business entity in exchange for an ownership interest. Adjusted Basis FMVCash $100,000 $100,000Land and building 60,000 95,000What are the tax consequences of the contribution to Mai if the business entity is a(n):a. Sole proprietorship? b. General partnership? c. Limited partnership? d. C corporation? e. S corporation?
Gamma Corporation distributes land to its sole shareholder, Lisa. The land has a basis to the corporation of $20,000 and a fair market value of $50,000. There is a $35,000 mortgage on the land which the shareholder agrees to assume. Before this distribution, Gamma has current E&P of $5,000 and accumulated E&P of $4,000. How much gain does Gamma Corporation recognize as a result of this distribution? How much dividend income does Lisa recognize as a result of this distribution? What is Lisa’s basis for the land? What is Gamma Corporation’s E&P after the distribution?
Dudley Morgan gives Barbara Norman property worth $325,000. Dudley's basis in the property is $220,000. (a.) If Barbara sells the property for $375,000, what is her gain or loss on the sale? (b.) If Barbara sells the property for $295,000, what is her gain or loss? (c.) If the fair market value equals $270,000 and Barbara sells the property for $230,000, what is the gain or loss? * Explain in Full detail.
Mai is going to contribute the following assets to a business entity in exchange for an ownership interest. Adjusted Basis FMV Cash $100,000 $100,000 Land and building 60,000 95,000 What are the tax consequences of the contribution to Mai if the business entity is a(n): a. Sole proprietorship? b. General partnership? c. Limited partnership? d. C corporation? e. S corporation?
Donald and Melania agree to go into business together. Donald will contribute a building with a FMV of $600,000 and a tax basis of $200,000 in return for 50 percent of the stock in the corporation. The corporation will assume a $300,000 mortgage on the building. Melania will contribute $300,000 cash in return for 50% of the stock of the corporation. How much gain, if any, does Donald recognize on the transfer of his building assuming the transaction qualifies under IRC Section 351?
Van Industries and Frat Corporation trade land in 2021. Van has an adjusted basis of $740,000 in land, whereas Frat's land has a fair market value of $700,000 and an adjusted basis of $660,000. a. What are Van's realised and acknowledged benefits? b. What are the realised and recognised profits to Vans if Frat additionally pays $80,000 in cash to Van? What exactly is Van's stake in the newly purchased land? Could you please show me the work? I'm stumped. Thanks!c c. What are Vee's realised and recognised gains if Form it assumes a $100,000 recourse loan on his land? What is Vee's stake in the newly purchased property?
Explanation