Answered: Sim Pathy contributed land (fmv…

Sim Pathy contributed land (fmv $50,000, basis $40,000, mortgage of $10,000 assumed by corporation) for all stock in CCC corporation. Discuss tax consequences to Sim and C corporation

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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[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 Adjusted Tax Basis $ 34,000 340,000 1,020,000 FMV $ 68,000 510,000 782,000 $ 1,360,000 $ 1,394,000 Total 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 $1,260,000. 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 08-40 Part d (Algo) d. What is the corporation's adjusted tax basis in each of the assets received in the exchange? Adjusted basis Land $
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: Adjusted Tax FMV Basis $ 56,000 420,000 644,000 $ 1,120,000 $ 28,000 280,000 840,000 Inventory Building Land $ 1,148,000 Total 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 $1,020,000. 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.) Assume the corporation assumed a mortgage of $1,220,000 attached to the building and land. Assume the fair market value of the building is now $700,000 and the fair market value of the land is $1,484,000. The fair market value of the stock remains…
Castle and Dave formed an S corporation that is owned as follows: Castle 75% and Dave 25%. The corporation distributes an asset to each owner. The corporation has a basis of $45,000 for each asset. The fair market value of each of the assets is as follows: Castle $90,000 and Dave $50,000. a. What is the recognized gain for the corporation? b. How much of the gain does Castle report? c. How much of the gain does Dave report?
dppiies lo questiol displayed 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
Kat Co. (a CCPC) reported a net income for tax purposes of $800, 000 in Year 1. In Year 1, Kat Co. made a contribution of $25,000 to eligible charities and received $30,000 in non eligible dividends from a connected taxable Canadian corporation. What is Kat Co.'s taxable income in Year 1? Multiple Choice $ 775,000 $745,000 $800,000 $770,000
3. Ramon incorporated his 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: FMV Adjusted Tax Basis Inventory $ 10,000 $ 4,000 Building 50,000 30,000 Land 100,000 50,000 Total $ 160,000 $ 84,000 The fair market value of the corporation’s stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) What is Ramon’s basis in the stock he receives in his corporation?
Tall Corporation (an S-corporation) has AAA of $16,000 and AEP of $8,000 .Tall Corp. distributes $20,000 of cash to its Henry, the sole shareholder. Henry's basis in his S Corp stock before the distribution is $40,000. Henry is in the 37% tax bracket. 1. What are the tax consequences to Henry as a result of this distribution? 2. What is ending balance in AAA and AEP. What is Henry's ending stock basis?
Ramon incorporated his 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 $ 10,000 50,000 100,000 $ 160,000 Adjusted Tax Basis $ 4,000 30,000 50,000 $ 84,000 The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. Required: a. What amount of gain loss does Ramon realize on the transfer of the property to his corporation? b. What amount of gain or loss does Ramon recognize on the transfer of the property to his corporation? c. What is Ramon's basis in the stock received in the new corporation? Required A Complete this question by entering your answers in…
Ramon incorporated his 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: Adjusted Tax Basis FMV $ 21,500 54,750 139,000 $ 215,250 $ 9,200 47,000 Inventory Building Land 69,000 $ 125,200 Total The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) c. What is Ramon's basis in the stock he receives in his corporation? Tax basis
Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $235,000 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: FMV Adjusted Tax Basis Building $ 88, 125 $ 23,500 Land 205, 625 94, 000 Total $ 293,750 $ 117,500 To equalize the exchange, Wiley Corporation paid Hermione $58, 750 in addition to her stock. d. What is Hermione's tax basis in the stock received in return for the contribution of property to the corporation? e. What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione? f. Assume Hermione's adjusted tax basis in the land was $235,000. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? G. Assume Hermione's adjusted tax basis in the land was $235,000. What adjusted tax basis…
Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $300,000 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: FMV Building $112,500 Land 262,500 Total $375,000 Adjusted Tax Basis $30,000 120,000 $150,000 To equalize the exchange, Wiley Corporation paid Hermione $75,000 in addition to her stock. i. Assume Hermione's adjusted tax basis in the land was $375,000. What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione seperately?
5. Carla 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: FMV Adjusted Tax Basis Inventory $ 20,000 $ 10,000 Building 150,000 100,000 Land 250,000 300,000 Total $ 420,000 $ 410,000 The corporation also assumed a mortgage of $120,000 attached to the building and land. The fair market value of the corporation’s stock received in the exchange was $300,000. (Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) What amount of gain or loss does Carla recognizeon the transfer of the property to her corporation?