Simone transferred 100 percent of her stock in Purple Company to Plum Corporation in a Type A merger. In exchange, she received stock in Plum with afair market value of $670,000 plus $670,000 in cash. Simone's tax basis in the Purple stock was $220,000. What amount of gain does Simone recognizein the exchange and what is her basis in the Plum stock she receives?Multiple Choice$1,120,000 gain recognized and a basis in Plum stock of $1,340,000.$1.120.000 gain recognized and a basis in Plum stock of $670,000.$670,000 gain recognized and a basis in Plum stock of $670,000.$670,000 gain recognized and a basis in Plum stock of $220,000.

Formula: Gain Realized = Fair value of stock + cash - tax basis stock Deduction of tax basis stock…

Answered: Simone transferred 100 percent of her…

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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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 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 or 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 FMV $24,000 54, 250 181, 000 $ 259, 250 Complete this question by entering your answers in the tabs below. Required B Adjusted Tax Basis…
Antoine transfers property with a tax basis of $524 and a fair market value of $647 to a corporation in exchange for stock with a fair market value of $569 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $78 on the property transferred. What is Antoine's tax basis in the stock received in the exchange? Multiple Choice O $647 O $524 $569 O$446.
H sold shares of a public company worth $90,000 to a Canadian corporation owned by H and her spouse. The shares had an adjusted cost base of $130,000 at the time of the sale. The corporation continues to own the shares. What is the amount of H's allowable capital loss? Note: Do not place a minus sign in front of the amount.
Assume, for purposes of this question only, that Susan acquired 2,000 shares of Hawk Corporation stock for $80,000 on March 31, 2014. On March 1, 2023, she sells 125 shares for $3,750. On March 22, 2023, she purchases 135 shares of Hawk Corporation stock for $4,725. a. What is Susan’s realized gain or loss from the sale on March 1, 2023? b. What is Susan’s recognized gain or loss from the sale on March 1, 2023? c. What is Susan’s basis in the 135 shares purchased on March 22, 2023? d. When does Susan’s holding period begin for the 135 shares
Jon owns 100 % of Jon, Inc (J). Jis liquidated and Jon receives land with a FMV of $500,000 and a tax basis of $300,000 and a building with a fair market value of $1,000,000 and a tax basis of $200,000. The building is subject to a mortgage of $100,000. Jon's basis in Jl stock $200,000. Jl has $3,000,000 of eamings and profits. As a result of the liquidation, Jon must recognize income of OA $1,400,000 dividend Income OB. $1,300,000 capital gain OC 50 income OD. $1,200,000 capital gain
Simone transferred 100 percent of her stock in Purple Company to Plum Corporation in a Type A merger. In exchange, she received stock in Plum with a fair market value of $670,000 plus $670,000 in cash. Simone's tax basis in the Purple stock was $220,00O. What amount of gain does Simone recognize in the exchange and what is her basis in the Plum stock she receives? Multiple Choice $1,120,000 gain recognized and a basis in Plum stock of $1,340,000. $1,120,000 gain recognized and a basis in Plum stock of $670,000. $670,000 gain recognized and a basis in Plum stock of $670,000. $670,000 gain recognized and a basis in Plum stock of $220,000.
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Hayden owns 100% of the shares of ABC Co. Hayden's spouse owns 100% of the shares of XYZ Co. The shares of ABC Co. are valued at $50,000 with an ACB and PUC of $1000. The couple planning for XYZ Co. to pay Hayden $50,000 in cash for the shares in ABC Co. Which of the following will result from this sale? Multiple Choice Hayden will recognize a capital gain of $49,000. Hayden will recognize a deemed dividend of $50,000 and a capital gain of $0. Hayden will recognize a deemed dividend of $49,000 and a capital gain of $0. Hayden will recognize a capital gain of $50,000.
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