On January 7, 2022, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are: Shareholder's Fair Market Built in Gain Basis Value or (Loss) Property 1 Property 2 $551,000 $661,200 $110,200 $936,700 $716,300 Net built-in loss ($220,400) ($110,200) Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 25% shareholder when the property is worth $606,100. a. Compute Martin's basis in Property 1 and in Property 2 as of January 7, 2022. Martin's basis is Property 1 is a carryover Martin's basis in Property 2 is a stepped-down basis of $ 551,000. basis of $ 826,500 . b. Compute Martin's realized and recognized loss on the liquidating distribution of Property 2. 110,200 Martin has a realized loss of $ and a recognized loss of $ ✔.

On January 7, 2022, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are: Shareholder's Fair Market Built in Gain Basis Value or (Loss) Property 1 Property 2 $551,000 $661,200 $110,200 $936,700 $716,300 Net built-in loss ($220,400) ($110,200) Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 25% shareholder when the property is worth $606,100. a. Compute Martin's basis in Property 1 and in Property 2 as of January 7, 2022. Martin's basis is Property 1 is a carryover Martin's basis in Property 2 is a stepped-down basis of $ 551,000. basis of $ 826,500 . b. Compute Martin's realized and recognized loss on the liquidating distribution of Property 2. 110,200 Martin has a realized loss of $ and a recognized loss of $ ✔.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 16MCQ

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Exercise 20-18 (Algorithmic) (LO. 1) On January 7, 2022, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are: Property 1 Property 2 Net built-in loss Shareholder's Fair Market Built in Gain Basis Value or (Loss) $439,440 $476,060 $366,200 $622,540 $73,240 ($146,480) ($73,240) Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 20% shareholder when the property is worth $402,820. a. Compute Martin's basis in Property 1 and in Property 2 as of January 7, 2022. 125,000 x. Martin's basis is Property 1 is a carryover Martin's basis in Property 2 is a stepped-down ✔ basis of $ ✔basis of $ 3,233,223 X. b. Compute Martin's realized and recognized loss on the liquidating distribution of Property 2. 2,324,232 X. 23,324 X and a recognized loss of $ Martin has a realized loss of $
Exercise 20-15 (LO. 1) On January 4, 2018, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are: Property 1 Property 2 Net built-in loss Shareholder's Fair Market Built in Gain Basis Value or (Loss) $300,000 $75,000 $525,000 ($125,000) ($50,000) Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 30% shareholder when the property is worth $350,000. a. Compute Martin's basis in Property 1 and in Property 2 as of January 4, 2018. Martin's basis is Property 1 is a carryover ✔ basis of $ Martin's basis in Property 2 is a stepped-down ✓✔ basis of $ Feedback $375,000 $400,000 b. Compute Martin's realized and recognized loss on the liquidating distribution of Property 2. Martin has realized loss of $ and a recognized loss of $ ▼ Check My Work When property is transferred to a…
On January 7, 2022, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder's basis, the fair market value, and the built-in gain (loss) of each property are: Shareholder's Fair Market Built in Gain Basis Value or (Loss) Property 1 $471,800 $566,160 $94,360 Property 2 $802,060 $613,340 ($188,720) Net built-in loss ($94,360) Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 45% shareholder when the property is worth $518,980. a. Compute Martin's basis in Property 1 and in Property 2 as of January 7, 2022. Martin's basis is Property 1 is a Martin's basis in Property 2 is a basis of $ basis of $ b. Compute Martin's realized and recognized loss on the liquidating distribution of Property 2. Martin has a realized loss of $ and a recognized loss of $
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On January 7, 2021, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder’s basis, the fair market value, and the built-in gain (loss) of each property are: Martin Corporation Properties Property Shareholder's Basis Fair Market Value Built-in Gain (Loss) Property 1 $300,000 $375,000 $75,000 Property 2 $525,000 $400,000 ($125,000) Net Built-In Loss: ($50,000) Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 30% shareholder when the property is worth $350,000. Compute Martin’s basis in Property 1 and in Property 2 as of January 7, 2021. Compute Martin’s realized and recognized loss on the liquidating distribution of Property 2.
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Q.2. In a complete liquidation, Corporation Z distributes a building with adjusted tax basis of $200,000 and fair market value of $300,000 to its shareholder, Z. The shareholder assumes the liability on the building equal to $325,000. Z has basis in their stock of $50,000. Immediately after this transaction, what is the shareholder’s basis in the building? 275,000 200,000 325,000 300,000
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Required information Problem 19-37 (LO 19-2) (Algo) [The following information applies to the questions displayed below] 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 Inventory Building Land Total FMV $ 31,750 74,000 104,000 $ 209,750 Adjusted Tax Basis $ 10,200 50,500 93,500 $ 154,200 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. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. Gain or loss realized Problem 19-37 Part a (Algo) a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation?
12 Required information Problem 19-39 (LO 19-2) [The following information applies to the questions displayed below.] Part 7 of 7 Zhang incorporated her 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 bases: polnts Adjusted Basis $ 24,000 240,000 FMV $ 48,000 Inventory Building 360,000 552,000 Land 720,000 eBook Total $960,000 $984,000 References The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $860,000. The transaction met the requirements to be tax-deferred under $351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) Problem 19-39 Part g Assume the corporation assumed a mortgage of $1,060,000 attached to the building and land.…
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