Pursuant to a plan of corporate reorganization in a transaction that qualified as a reorganization under Code Section 368(a)(1), Lou received the following in exchange for a share of stock with a $95 basis to Lou: One share of stock worth $65 Cash of $20 What is Lou's recognized gain or loss (if any) on this exchange? a. $0 b. $10 loss c. $10 gain d. $20 gain
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- 2a. Alpha Corporation owns assets valued at $400,000 and liabilities of $100,000. Beta Corporation transfers $160,000 of its voting stock and $40,000 in cash for 75% of Alpha's assets and all of its liabilities. Alpha distributes its remaining assets and the Beta stock to its shareholders. Alpha then liquidates. Is this a taxable transaction? If this is not a taxable transaction, then identify the type of reorganization. b. Beta Corporation owns assets valued at $1,500,000 with liabilities of $700,000, and Alpha holds assets valued at $350,000 with liabilities of $150,000. Beta transfers 200,000 shares of stock and $50,000 cash, and it accepts $100,000 of Alpha's liabilities, in exchange for all of the Alpha assets. Alpha distributes the Beta stock to its shareholders for their Alpha stock and then ceases to exist. Is this a taxable transaction? If this is not a taxable transaction, then identify the type of reorganization. c. Alpha Corporation obtained 200,000 shares of Beta…What is the stock basis for Harold in the following: Harold transfers the following to a newly formed corporation: Land (basis of $50,000 and FMV of $100,000) Building (basis of $50,000 and FMV of $400,000) Accounts payable of $10,000 (for business supplies) Notes Payable 1 for building improvements of $185,000 Oa Zero (original basis plus gain recognized less liabilities transferred) Ob s05,000 the gain recognized Oc $5,000 (the gain recognized less original basin) Od $100,000 ($50 - 150) O. 1S05,000) (8100,000 basis less 8195,000 gain)Determine whether the following transactions are taxable in the current year, applying the corporate reorganization rules. If a transaction is not taxable, indicate what type of reorganization is affected, if any. Alpha Corporation owns assets valued at $400,000 and liabilities of $100,000. Beta Corporation transfers $160,000 of its voting stock and $40,000 in cash for 75% of Alpha’s assets and all of its liabilities. Alpha distributes its remaining assets and the Beta stock to its shareholders. Alpha then liquidates. Beta Corporation owns assets valued at $1,500,000 with liabilities of $700,000, and Alpha holds assets valued at $350,000 with liabilities of $150,000. Beta transfers 200,000 shares of stock and $50,000 cash, and it accepts $100,000 of Alpha’s liabilities, in exchange for all of the Alpha assets. Alpha distributes the Beta stock to its shareholders for their Alpha stock and then ceases to exist. Alpha Corporation obtained 200,000 shares of Beta Corporation’s stock…
- Goose Corporation has a basis of $2,400,000 in the stock of Swift Corporation, a wholly owned subsidiary acquired 30 years ago. Goose liquidates Swift Corporation and receives assets that are worth $2,000,000 and have a basis to Swift of $1,700,000. a. Determine Goose Corporation’s recognized gain or loss on the liquidation. b. Determine Goose Corporation’s basis in the assets received in liquidation.Goose Corporation has a basis of $7,645,000 in the stock of Swift Corporation, a wholly owned subsidiary acquired 30 years ago. Goose liquidates Swift Corporation and receives assets that are worth $6,116,000 and have a basis to Swift of $ 5,351,500. If an amount is zero or there is no gain or loss, enter "0". a. Determine Goose Corporation's recognized gain or loss on the liquidation. Goose recognizes of: . As a result, Goose's basis in the Swift stock is now s b. Determine Goose Corporation's basis in the assets received in liquidation. Goose Corporation has a basis of $ in the assets received in liquidation.T holds two business assets, X (with a basis of 30 and a value of 120) and Y (with a basis of 70 and value of 50). T also has outstanding debt of $40 (held by C). T is wholly owned by A whose basis for his T stock is 50 (with a value of $130). Acquiring corporation P will acquire T’s assets in what is assumed to be a qualified section 368 reorganization. If T merges into P for $65 of P stock and $65 in cash, which cash and stock are distributed to A upon the surrender of A’s T shares; and P assumes T’s debt to C. Describe the consequences of the reorganization transaction to T, T’s shareholder A & P. a) Transferor corporation (T) b) Transferor Corporation’s shareholder (A) c) Acquiring Corporation (P)
- Brett and Illain formed a new Corporation by transferring the following assets in exchange for stock:▪ Brett transferred: Property subject to a 70,000 mortgage; FMV $1,000000, Basis 500,000. In exchange, she received 200 shares of Stock and relief of the mortgage liability. ▪ Illain transferred: Inventory with a Basis of 15,000 and FMV 150,000. Required:a. What is Brett’s basis in the stock she received b. What is Brett’s recognized gain/lossPursuant to a complete liquidation, Carrot Corporation distributes to its shareholders real estate held as an investment (basis of $1,066,000, fair market value of $1,385,800). a. Determine the gain or loss recognized by Carrot on the distribution if no liability is involved. If no liability is involved, Carrot has a recognized of $ on the distribution. b. Determine the gain or loss recognized by Carrot on the distribution if the real estate is subject to a liability of $1,172,600. If the real estate is subject to a liability of $1,172,600, Carrot has a recognized of $ C. Determine the gain or loss recognized by Carrot on the distribution if the real estate is subject to a liability of $1,492,400. If the liability were $1,492,400, Carrot's recognized on the distribution would beIndividual A owns 50 common shares of X Corp. with an adjusted basis of 90,000. Individual B owns 50 X common shares with an adjusted basis of 150,000. X has accumulated earnings and profits of 50,000 and no results from operations for the current year. Before the transaction below, X has two assets, cash of 100,000 and land with an adjusted basis of 70,000 and a fair market value of 150,000. X liquidates distributing its assets evenly between A and B. Assume that X pays any taxes it owes from the available cash and distributes the remaining cash. What are all of the tax consequences to all of the parties?
- A, an individual (“A”) and X Corporation (“X”) each transferred property with a fair market value (“FMV”) of $100,000 and an adjusted basis of $20,000 to newly formed C Corporation (“C”) in exchange for 10 shares of C Corporation stock. These are the only shares of C outstanding. Assuming the transfers are related: a. What income, gain or loss, if any does A recognize in this transaction? b. If C’s current E&P during the year were $30,000, and C distributed $40,000 cash to each of X, and A, during the year, what is X’ taxable income (assuming the distribution from C is X’ only transaction during the year)?Andre incorporated his sole proprietorship by transferring the following assets and debts to Raiders Corp, in returm for 100 percent of Raider. Corp's stock. The fair market value of Raider Corp. stock received in the exchange equals the FMV or the assets transferred, less the debt assumed by Raider Corp. Adjusted Debt / Mortgage Asset FMV Basis Transferred with Asset Recording Equipment $40,000 $30,000 n/a Building $140,000 $90,000 $50,000 Land $230,000 $280.000 $60.000 Total $410,000 $400,000 $110,000 Question 1: What amount of gain or loss does Andre realize on the exchange? Select | Question 2: What amount of gain or loss does Andre recognize on the exchange? (Select Question 3: What is Andre's basis in the stock he receives in Raider Corp.? Select]Accounting A and B, unrelated individuals, were the sole shareholders of L corporation. A was a 60% shareholder and B was a 40% shareholder. Pursuant to a plan of liquidation, L liquidated and distributed its two assets to A and B pro rata. (Asset#1 a capital asset acquired 2 years ago in a Section 351 transaction with a fair market value ("FMV") of $100,000 and an adjusted basis of $110,000 and Asset #2 an ordinary asset acquired two years ago in a taxable purchase with a FMV of $60,000 and adjusted basis of $70,000). L also distributed a liability of $10,000 (pro rata). L had no other tax attributes or transactions. A's adjusted basis $100,000 and B's adjusted basis was $20,000 in their L shares respectively. i. What income, gain or loss, if any, does L recognize as a result of the Liquidation? ii. What income, gain of loss, if any, does B recognize as a result of the Liquidation? iii. What adjusted basis does A take in A's share of Asset #
