Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $305,000 in return for 50 percent ofthe corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted taxbases in return for 50 percent of the corporation's stock: (Leave no answer blank. Enter zero if applicable. Negativeamount should be indicated by a minus sign.)Adjusted TaxFMVBasis$ 114,375266,875$ 381,250$ 30,500122,000$ 152,500BuildingLandTotalTo 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?LandBuildingAdjusted tax basis

As per Section 351, if total adjusted tax basis of property transferred by a shareholder to a…

Ron and Hermione formed Wizard Corporation on January 2. Ron contrib the corporation's stock. Hermione contributed a building and land with th bases in return for 50 percent of the corporation's stock: (Leave no answ amount should be indicated by a minus sign.) Adjusted Tax Basis FMV $ 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

Ron and Hermione formed Wizard Corporation on January 2. Ron contrib the corporation's stock. Hermione contributed a building and land with th bases in return for 50 percent of the corporation's stock: (Leave no answ amount should be indicated by a minus sign.) Adjusted Tax Basis FMV $ 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required information Problem 19-40 (LO 19-2) (Algo) [The following information applies to the questions displayed below.] 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 tax bases: Inventory Building Land Total FMV $ 40,000 300,000 460,000 Adjusted Tax Basis $ 20,000 200,000 600,000 $ 800,000 $ 820,000 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 $700,000. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Problem 19-40 Part g (Algo) g. Suppose the corporation assumed a mortgage of $900,000 attached to the building and land. The fair market value of the building is $500,000 and the fair market value of the…
George transfers the following (assume it is a 351), what is his stock basis? Land (basis $40,000 and FMV of $100,000) Notes payable on land for land improvements ($25,000) He also gets back $10,000 in cash from transfer O a. $15,000 O b. Zero Oc $30,000 Od $40,000 Oe $5,000
Required information Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Kevan: Cash Land* Totals Tax basis Fair Market Value *Nonrecourse liability secured by the land equals $210,000. Each member received a one-third capital and profits interest in the LLC. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. Basis $ 15,000 120,000 $ 15,000 440,000 $ 135,000 $ 455,000 g. If the lender holding the nonrecourse liability secured by Kevan's land required Kevan to guarantee 1/3 of the liability and Jerry to guarantee the remaining 2/3 of the liability when Albee LLC was formed, what are the members' tax bases in their LLC interests? Kevan $285,000 X Answer is complete but not entirely correct. Jerry $ 285,000 $ Dave 285,000
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*On June 1, Jaden contributed $7,000 and property, with an adjusted basis of $9,000 and a fair market value of $15,000, for a 20% share of Retro Classics, a business organized as a partnership. What is Jaden's beginning basis? (a) $7,000 (b) $9,000 (c) $16,000 (d) $22,000
Required information. Problem 19-63 (LO 19-5) (Algo) [The following information applies to the questions displayed below] Tiffany and Carlos decided to liquidate their jointly owned corporation, Royal Oak Furniture (ROF) After liquidating its remaining inventory and paying off its remaining liabilities, ROF had the following tax accounting balance sheet Adjusted Tax Basis $ 205,500 14,500 205,000 $425,000 Cash Building Land Total FMV $ 205,500 66,500 139,000 $ 411,000 Appreciation (Depreciation) Gain or loss recognized 52,000 (66,000) $ (14,000) Under the terms of the agreement, Tiffany will receive the $205,500 cash in exchange for her 50 percent interest in ROF Tiffany's tax basis in her ROF stock is $55,000. Carlos will receive the building and land in exchange for his 50 percent interest in ROF His tax basis in the ROF stock is $103,000 Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation…
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Required Information [The following information applies to the questions displayed below.] Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporation. In year 1, Julio and Milania each received distributions of $12,000 from Falcons Corporation. Sales revenue Cost of goods sold Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Salary to owners Julio and Milania Employee wages Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income Government fines Overall net income Distributions Ordinary Income Amount Year 1 $ 335,000 (42,000) (40,000) (30,000) (20,000) (30,000) 12,000 1,808 Allocated to Julio 0 $ 186,800 $ 24,000 a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information above? Assume that Falcons Corporation has $240,000 of qualified property (unadjusted basis). Year 2 $ 465,000…
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