Mr. Rogers transferred 100 percent of his stock in Mr. Rogers Neighborhood Company to PBs Television Corporation in a Type A merger. In exchange he received stock in PBS with a fair market value of $1,000,000 plus $500,000 in cash. Mr. Roger's tax basis in the Mr. Roger's Neighborhood stock was $300,000. What is Mr. Roger's basis in the PBS Television stock he receives in the merger?
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- 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 propertyIn 2020, Martin and Rebecca formed White Corporation. Martin transfers real estate with an adjusted basis of $260,000 and a fair market value of $350,000 to the newly formed White Corporation in exchange for 75% of the common stock of White Corporation. The real estate was encumbered by a mortgage of $275,000 which White Corporation assumed. Rebecca contributed equipment with a fair market value of $35,000 and an adjusted basis of $15,000 in exchange for 25% of the common stock and a $10,000 bond. What is the amount of gain or loss realized and recognized by Martin on the transfer of the real estate? What basis does Martin take in White Corporation stock? What basis does White Corporation take in the real estate contributed by Martin? What is the amount of gain or loss realized and recognized by Rebecca on the transfer of the equipment? What basis does Rebecca take in White Corporation stock? What basis does White Corporation take in the equipment contributed by Rebecca?Multiple shareholders form a new corporation in exchange for stock with a fair market value of $1,000 per share. Marky transfers investment land (current fair market value of $35,000) that he purchased 10 year ago for $15,000. In exchange, Marky receives 30 shares of stock and $5,000 cash. Anders transfers a machine with a basis of $45,000 and a fair market value of $35,000. Anders receives 30 shares of stock and $5,000 cash. Emmy transfers a rental office building (current fair market value of $45,000) that she 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 Emmy receives 25 shares of stock from the corporation in the exchange. Jace provided the legal services to organize the corporation (value $5,000) and contributes $10,000 in cash in exchange for 15 shares of stock. How much gain does Emmy recognize? a. 0 b. $5,000 c. $15,000 d. $20,000…
- Ramon incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted tax bases: Adjusted Tax FMV Basis $ 21,500 54,750 139,000 $ 9,200 47,000 Inventory Building Land 69,000 $ 215,250 $ 125,200 Total The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation? Gain or loss realizedBob and Steve form S corporation with Bob contributing land with a basis of $1,000 and fair market value of $4,000 in exchange for 40% of the stock and Steve contributing cash of $6,000 in exchange for 60% of the stock. They properly make the election under subchapter S of the Code to tax the corporation as an S corporation. During year 1 of operations, the corporation earns $10,000 of net profit, which consists of net ordinary income of $8,000 plus $2,000 of capital gain. During the year, the corporation distributes of $6,000 to shareholders. What is Bob’s adjusted basis in his stock of S corporation at the end of year 1?Simone transferred 100 percent of her stock in Purple Company to Plum Corporation in a Type A merger. In exchange, she received stock in Plum with a fair market value of $670,000 plus $670,000 in cash. Simone's tax basis in the Purple stock was $220,00O. What amount of gain does Simone recognize in the exchange and what is her basis in the Plum stock she receives? Multiple Choice $1,120,000 gain recognized and a basis in Plum stock of $1,340,000. $1,120,000 gain recognized and a basis in Plum stock of $670,000. $670,000 gain recognized and a basis in Plum stock of $670,000. $670,000 gain recognized and a basis in Plum stock of $220,000.
- Alabama Corporation, an S corporation, liquidates this year by distributing a parcel of land to its sole shareholder, Mark Ingram. The fair market value of the parcel is $58,500, and its tax basis is $36,000. Mark's basis in his stock is $29,500. d. Assume the fair market value of the land is $25,000 rather than $58,500. How much gain must Mark recognize (if any) as a result of the distribution, and what is his basis in the land? Land BasisIndividual E owns equipment that originally cost $60,000 and has an undepreciated capital cost of $40,000. E sells the equipment to a corporation for its market value of $50,000. To avoid tax on the transfer a section 85 election is filed by E and the corporation. What is the appropriate section 85 elected transfer price?Yvonne and Simon form Ion Corporation. Yvonne transfers equipment (basis of $226,400 and fair market value of $339,600). Simon invests $271,680 of cash. They each receive 100 shares in Ion Corporation, worth $271,680, but Yvonne also receives $67,920 in cash from Ion. Calculate Ion Corporation's basis in the equipment and determine Yvonne and Simon's basis in the Ion stock. Ion Corporation has a basis of $fill in the blank 1 __________? in the equipment. Yvonne has a basis of $fill in the blank 2_________? for her stock and Simon has a basis of $fill in the blank 3_________? for his stock.
- Jakob sold a piece of land he owned to a corporation in which he is the sole shareholder using the provisions of ITA 85(1). The land is capital property, the ACB is $59,600, and it had a FMV of $198,000 at the time of the sale. The elected amount is $59,600. As consideration for the property, he received a promissory note for $30, 100, preferred shares with a FMV of $109,000, and common shares with a FMV of $59,600. Which one of the following is the ACB of the preferred shares (first) and the ACB of the common shares (second)? Round your answers to the nearest cent as needed. O A. $19,071.77 and $10,428.23 O B. Nil and $29,500.00 O C. $109,000.00 and $59,600.00 D. $29,500.00 and NilHayden owns 100% of the shares of ABC Co. Hayden's spouse owns 100% of the shares of XYZ Co. The shares of ABC Co. are valued at $50,000 with an ACB and PUC of $1000. The couple planning for XYZ Co. to pay Hayden $50,000 in cash for the shares in ABC Co. Which of the following will result from this sale? Multiple Choice Hayden will recognize a capital gain of $49,000. Hayden will recognize a deemed dividend of $50,000 and a capital gain of $0. Hayden will recognize a deemed dividend of $49,000 and a capital gain of $0. Hayden will recognize a capital gain of $50,000.