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- Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Assets: Cash Investments Land Totals Liabilities and capital: Nonrecourse liabilities Tatsuki* Robert* Totals Tax basis $ Dave Basis 21,000 $ 180,000 130,000 230,000 $ 540,000 Answer is not complete. Tatsuki Robert $ 210,000 165,000 165,000 $ 540,000 *Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. Note: Leave no answer blank. Enter zero if applicable. Fair Market Value e. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest if Dave receives only a profits interest. $…Q.98. Smith and Jones create SJ Corporation. Smith contributes property with a fair market value of $80,000, and Jones contributes cash of $70,000. Each receives a 50% share in the corporation, and the corporation is valued at $140,000 immediately after the formation. Smith's property has an adjusted basis of $25,000, and is subject to a $10,000 mortgage, which is assumed by the company. What gain will Smith recognize in this situation? A. $0 B. $10,000 C. $15,000 D. $25,000Hi, can someone help me with this one please?
- Suppose Mr. Asib want to start a business in your local community. How much will be Mr. Asib's Start-up capital, second stage, and acquisition capital? How would you fund each capital amount? In which areas will mr. asib utilize this capital? Explain with justification.3) Esme transfers land with a FMV of $900,000 to a newly formed corporation in exchange for all the stock. The land has a basis of $400,000 and debt of $600,000. The basis of the land for Esme is:Prepare your answers using excel or clearly written computations. Show your work for maximum points. 3. Diego transfers real estate with an adjusted basis of $260,000 and fair market value of $350,000 to a newly formed corporation in exchange for 100% of the stock. The corporation assumes the liability on the transferred real estate in the amount of $300,000. Determine Diego’s recognized gain on the transfer and the basis for his stock.
- Why the maximization of shareholders wealth overrules the objective of maximizingearnings?b) How does being a limited partner in a business enterprise differ from being a stockholder,assuming the same percentage of ownership?c) If you are scheduled to receive a certain sum of money five years from now but wish tosell your contract for its present value, which type of compounding would you prefer tobe used in the calculation? Why?d) John Selvester is 47 years old and is presently experiencing the “good” life. As a result,he anticipates that he will increase his weight at a rate of 4 percent a year. At present heweighs 250 pounds. What will he weigh at age 60?e) Allen wishes to purchase an annuity contract that will pay him $8,000 a year for the restof his life. The State Life Insurance Company figures that his life expectancy is 25 years,based on its actuary tables. The company imputes a compound annual interest rate of 6percent in its annuity contracts. How much will Allen have to pay…X owned a land worth 100M and with cost of 80M. X transferred the land to XYZ Corp in exchange for stocks with total par value of 90M. As a result, X became a major stockholder of the corporation., What is the taxable gain?What investment is eligible to be held within a RRIF? • a) shares of a privately owned corporation O b) gold bars • c) commodity futures contracts O d) real estate
- 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)?Required information [The following information applies to the questions displayed below.] During the current year, Ron and Anne sold the following assets: (Use the dividends and capital gains tax rates and tax rate schedules.) Capital Asset Market Value Tax Basis Holding Period L stock $ 50,000 $ 41,000 > 1 year M stock 28,000 39,000 > 1 year N stock 30,000 22,000 1 year 300,000* 90,000 > 1 year *$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property). Ignore the Net Investment Income Tax. a. Given that Ron and Anne have taxable income of only $20,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2022 assuming they file a joint return? Answer is complete but not entirely correct. Gross tax liability $ 0Henry transfers property with an adjusted basis of $95,000 and an FMV of $100,000 to a newly formed corporation in a Sec. 351 exchange. Henry receives stock with an FMV of $85,000 and a short-term note with a $15,000 FMV. Henry's basis in the stock is A. $90,000. B. $85,000. C. $100,000. D. $95,000.