oe and Sunny intend to enter into a business venture together and decided that an S corporation would be a desirable entity choice for federal income tax purposes. The corporation is named JS Inc. (“JS”). For newly established JS, Joe intends to contribute Property A with a fair market value (“FMV”) of $800 and basis of $300. Sunny intends to contribute cash of $800. Now assume the fact that Joe contributes Property with a FMV of $800 and basis of $300, but subject to debt of $500.   54. Provide Joe’s basis in JS upon contribution.     55. Provide JS’s basis in Property A immediately after the contribution.     Now assume that Joe receives cash of $300 and stock for his contribution of Property A with a FMV of $800 and basis of $300, subject to no debt.   56. Provide Joe’s basis in JS upon contribution.     57. Provide JS’s basis in Property A immediately after the contribution.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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oe and Sunny intend to enter into a business venture together and decided that an S corporation would be a desirable entity choice for federal income tax purposes. The corporation is named JS Inc. (“JS”). For newly established JS, Joe intends to contribute Property A with a fair market value (“FMV”) of $800 and basis of $300. Sunny intends to contribute cash of $800.

Now assume the fact that Joe contributes Property with a FMV of $800 and basis of $300, but subject to debt of $500.

 

54. Provide Joe’s basis in JS upon contribution.

 

 

55. Provide JS’s basis in Property A immediately after the contribution.

 

 

Now assume that Joe receives cash of $300 and stock for his contribution of Property A with a FMV of $800 and basis of $300, subject to no debt.

 

56. Provide Joe’s basis in JS upon contribution.

 

 

57. Provide JS’s basis in Property A immediately after the contribution.

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