None Question:512Which of the following is not a required characteristic of aqualifying Section 351 transaction?A. If more than 20 percent of the dock is transferred forservices, a property must also be transferred by theservice provider.B. Gain may be recognized if the transferor receivessomething other than stock.C. The transferors must control the corporation after thetransfer.D. Control requires only owning 80 percent of the value ofthe voting stock.E. All are characteristics.

When property is given to a company in return for its shares, it is considered a qualifying…

Answered: Question:512 Which of the following is…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 17MCQ

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9 When making non-cash distributions where the fair market value of the property distirbuted exceeds its adjusted basis, corporations must: a. Defer the gain until such time as the recipient shareholder disposes of all stock in the corporation b. Disclose the adjusted basis info to the recipient shareholder so the shareholder may recognize the gain upon disposition. c. Recognize gain under IRC 311
33. A purchaser of a business will generally prefer which of the following? An asset purchase to receive new basis for depreciation A stock purchase because the seller will receive capital gains Utilizing a §338(g) election If the selling entity is an S Corporation making a joint §338(h)(10) election All of the above A,C,&D What form is required to report the allocation of the purchase price? ____________
3. X transfers a publicly traded marketable equity security to Y with a date-of transfer price equal to $25. For each of the following transfer provisions [considered independently], identify the affected condition (#1, 2 or 3) for sale accounting and whether the provision prevents sale accounting for the transfer. A) A legal letter included a "would" opinion stating that the security would be beyond the reach of the powers of a bankruptcy trustee of X. Thus, the transferred asset is isolated from X. B) Y may sell the security to a third party. In the event when X exercise a call option to buy back the security, Y may purchase the same security from the open market as a replacement. C) X writes a put to Y, having an exercise price of $29 (Giving Y the right to sell at $29). The asset price is unlikely to rise beyond $28.
Hippo Co. is a holding company. It holds all the shares of Opco. Shareholder H holds all the shares of Hippo Co. What should Opco be directed to do prior to its sale in order to minimize taxable capital gains? a. Transfer all assets to Hippo Co. before sale. b. Transfer all shares in Opco to Shareholder H prior to the sale c. Transfer all the shares of Hippo Co. to shareholder H prior to the sale. d. Pay a tax-free dividend to Hippo Co. from Opco prior to the sale
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Exercise 6-33 (Algorithmic) (LO. 4) 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 $936,700 $661,200 $110,200 $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. Martin has a realized loss of $ and a recognized loss of $ 110,200 ✔.
Which of the following statements in incorrect? a. Donations of PPE should be recorded at the fair value of the donated asset at the time of donation. b. Property acquired in exchange for shares or other securities in the enterprise should be recorded at its fair value or the fair value of the securities, whichever is more clearly evident c. When property is acquired in exchange for another asset without commercial substance, no gain nor loss is recognized d. When a group of assets is acquired for a lump sum price, the total cost should be allocated to the individual assets based on their carrying amounts.
H6.
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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Ef 65.
16 S1: An acquirer may be able to obtain control over an entity without transferring any consideration.S2 In preparing working paper eliminating entries on the date of acquisition, the stockholders’ equity account of the acquiree must be eliminated to the extent of the ownership interest of the acquirer only. Group of answer choices S1: False; S2: False S1: True; S2: True S1: True; S2: False S:1 False; S2: True

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