What was I doing wrong with the numbers? Required information[The following information applies to the questions displayed below.]Nareh joined Jim in forming DBJ Corporation. Nareh contributed appreciated land for 90 percent of the stock in DBJ. Jimreceived 10 percent of the DBJ stock valued at $15,000. Determine Jim's tax consequences in each of the followingalternative scenarios.Note: Leave no answer blank. Enter zero if applicable.b. Jim contributed the rights to a patent he owned to DBJ in exchange for the DBJ stock. The patent was worth $15,000 and Jim'sbasis in the patent was $8,000. How much gain does Jim recognize on the exchange? What is Jim's basis in the DBJ stock?Answer is complete but not entirely correct.Gain recognized$ 7,000 ☑Jim's basis in the stock$ 15,000 x

Scenario:Jim contributes the rights to a patent to DBJ in exchange for 10% of the stock, valued at…

Answered: Required information [The following…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter13: Corporations: Earning & Profits And Distributions

Section: Chapter Questions

Problem 22P

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Betty joined Jim in forming DBJ Corporation. Betty contributed appreciated land for 90 percent of the stock in DBJ. Jim received 10 percent of the DBJ stock valued at $15,000. Determine Jim's tax consequences in each of the following alternative scenarios. (Leave no answer blank. Enter zero if applicable.) b. Jim contributed the rights to a patent he owned to DBJ in exchange for the DBJ stock. The patent was worth $15,000 and Jim's basis in the patent was $8,000. How much gain does Jim recognize on the exchange? What is Jim's basis in the DBJ stock? Gain recognized Jim's basis in the stock
Betty joined Jim in forming DBJ Corporation. Betty contributed appreciated land for 90 percent of the stock in DBJ. Jim received 10 percent of the DBJ stock valued at $15,000. Determine Jim's tax consequences in each of the following alternative scenarios. (Leave no answer blank. Enter zero if applicable.) a. Jim received the stock in exchange for providing computer-related services for the corporation. What amount of income or gain does Jim recognize on the exchange? What is Jim's basis in the stock he received in the exchange? Income or gain recognized Jim's basis in the stock
[The following information applies to the questions displayed below.] Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $205,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Building Land Total FMV $ 76,875 179,375 $ 256,250 To equalize the exchange, Wizard Corporation paid Hermione $51,250 in addition to her stock. Gain or loss realized Adjusted Tax Basis $ 20,500 82,000 $ 102,500 :. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? $
[The following information applies to the questions displayed below.] Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $305,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Adjusted Tax FMV Basis $ 114,375 266,875 $ 381,250 $ 30,500 122,000 $ 152,500 Building Land Total To equalize the exchange, Wizard Corporation paid Hermione $76,250 in addition to her stock. Assume Hermione's adjusted tax basis in the land was $381,250. i. What adjusted tax basis does Wizard Corporation take in the land and building received from Hermione? Land Building Adjusted tax basis $ 53,375
! Required information [The following information applies to the questions displayed below.] Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Building Land Total FMV $ 75,000 175,000 $ 250,000 Adjusted Tax Basis $ 20,000 80,000 $ 100,000 To equalize the exchange, Wizard Corporation paid Hermione $50,000 in addition to her stock. Adjusted tax basis e. What adjusted tax basis does Wizard Corporation take in the land and building received from Hermione? Land Building
! Required information [The following information applies to the questions displayed below.] Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Building Land Total FMV $ 75,000 175,000 $ 250,000 Adjusted Tax Basis $ 20,000 80,000 $ 100,000 To equalize the exchange, Wizard Corporation paid Hermione $50,000 in addition to her stock. Gain or loss realized Gain or loss recognized a. What amount of gain or loss does Ron realize on the formation of the corporation? What amount, if any, does he recognize?
! Required information [The following information applies to the questions displayed below.] Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Building Land Total FMV $ 75,000 175,000 $ 250,000 Adjusted Tax Basis $ 20,000 80,000 $ 100,000 To equalize the exchange, Wizard Corporation paid Hermione $50,000 in addition to her stock. Tax basis b. What is Ron's tax basis in the stock he receives in return for his contribution of property to the corporation?
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Zane, an individual, owns all of the outstanding common stock in XYZ Utilities Corporation. Zane purchased his XYZ stock seven (7) years ago and his basis is $8,000. Before the transactions listed below, XYZ has $25,000 of accumulated earnings and profits and no current earnings and profits. Determine the tax consequences to Zane and XYZ in each of the following alternative situations: (c) XYZ distributes land ($20,000 FMV, $11,000 basis) which it has used in its business. Zane takes the land subject to a $16,000 mortgage. (d) Assume XYZ has $15,000 of current earnings and profits (in addition to its $25,000 accumulated earnings and profits) and it distributes to Zane land ($20,000 FMV, $30,000 basis) which it held as an investment. Compare this result if XYZ first sold the land and then distributed the proceeds. (e) XYZ distributes machinery used in its business ($10,000 FMV, zero adjusted basis for tax purposes, and $2,000 for earnings and profits purposes). The…
Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $305,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Adjusted Tax FMV Basis $ 114,375 266,875 $ 381,250 $ 30,500 122,000 $ 152,500 Building Land Total To equalize the exchange, Wizard Corporation paid Hermione $76,250 in addition to her stock. Assume Hermione's adjusted tax basis in the land was $381,250. i. What adjusted tax basis does Wizard Corporation take in the land and building received from Hermione? O Answer is complete but not entirely correct. Land Building Adjusted tax basis 175,375 X $ 53,375
Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $305,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Adjusted Tax FMV Basis $ 114,375 266,875 $ 381,250 $ 30,500 122,000 $ 152,500 Building Land Total To equalize the exchange, Wizard Corporation paid Hermione $76,250 in addition to her stock. Assume Hermione's adjusted tax basis in the land was $381,250. h. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? Gain or loss realized Gain or loss recognized
Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $305,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) Adjusted Tax FMV Basis $ 114,375 266,875 $ 381,250 Building $30,500 122,000 $ 152,500 Land Total To equalize the exchange, Wizard Corporation paid Hermione $76,250 in addition to her stock. d. What is Hermione's tax basis in the stock she receives in return for her contribution of property to the corporation? Tax basis

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