Terry is the sole shareholder of Magic Corporation, an 5-Corporation formed 1/1/Y1.Terry initially contributed property to form the corporation with a FMV of $100,000and a basis of $75,000. The following transactions occurred in Y1:Ordinary Business Income $23,000%3DTax Exempt Interest Income%3D$10,000Short Term Capital Losses $3,000 (no other canital gains or losses)Nondeductible Expenses $5,000%3D%3DIn addition Terry withdrew $40,000 from Magic Corporation. What was Tery's grossincome increase and stock basis in Magic Corporation stock at the end of Y1?Gross Income $22,000 - Basis $62.000.Gross Income $22.000 - Basis = $82.000.Gross Income $17,000 Basis = $62,000.%3DGross Income $17,000- Basis = $62,000.%3D

Gross income: Gross income is the total income before paying tax and other deductions.

Terry is the sole shareholder of Magic Corporation, an 5-Corporation formed 1/1/Y1. Terry initially contributed property to form the corporation with a FMV of $100,000 and a basis of $75,000. The following transactions occurred in Y1: Ordinary Business Income $23,000 Tax Exempt Interest Income $10,000 %D %3D Short Term Capital Losses = $3,000 (no other canital gains or losses) Nandeddctible Expenses $5,000 %3D In addition Terry withdrew $40,000 from Magic Corporation. What was Tery's gross income increase and stock basis in Magic Corporation stock at the end of Y1? Gross Income $22,000 - Basis = $62.000. Gross Income $22,000 - Basis $82.000. Gross Income $17,000 - Basis = $62,000. Gross Income $17,000- Basis = $62,000.

Terry is the sole shareholder of Magic Corporation, an 5-Corporation formed 1/1/Y1. Terry initially contributed property to form the corporation with a FMV of $100,000 and a basis of $75,000. The following transactions occurred in Y1: Ordinary Business Income $23,000 Tax Exempt Interest Income $10,000 %D %3D Short Term Capital Losses = $3,000 (no other canital gains or losses) Nandeddctible Expenses $5,000 %3D In addition Terry withdrew $40,000 from Magic Corporation. What was Tery's gross income increase and stock basis in Magic Corporation stock at the end of Y1? Gross Income $22,000 - Basis = $62.000. Gross Income $22,000 - Basis $82.000. Gross Income $17,000 - Basis = $62,000. Gross Income $17,000- Basis = $62,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Corporation P owns 93 percent of the outstanding stock of Corporation T. This year, the corporation’s records provide the following information: Corporation P Corporation T Ordinary operating income (loss) $ 500,000 $ (200,000) Capital gain (loss) (8,300) 6,000 Section 1231 gain (loss) (1,000) 5,000 Required: Compute each corporation’s taxable income if each files a separate tax return. Compute consolidated taxable income if Corporation P and Corporation T file a consolidated tax return. My solutions: 1. Corporation P: $499,000 and Corporation T: ($189,000), 2. $310,000 I missed this problem on my homework. Could you please explain how to get the correct answer?
=&inprogress=false During the current year, Jimmy incorporates his data processing business. Jimmy is the sole shareholder. The following assets are transferred to the corporation: Cash $2,000 Computer Equipment: Fair market 20,000 value Adjusted basis 12,000 Original cost 24,000 Furniture: Fair market 20,000 value Adjusted 32,000 basis Original cost 64,000 How much gain (loss) will Jimmy recognize from the transfer of the assets to the corporation? Oa. S-0- Ob. $8,000 Oc. S(12.000) Od. $20,000 Oe. S(4.000) Previous Next
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…
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 bases: FMV Adjusted Basis Inventory $ 60,000 $ 30,000 Building 450,000 300,000 Land 690,000 900,000 Total $ 1,200,000 $ 1,230,000 Assume the corporation assumed a mortgage of $1,300,000 attached to the building and land. Assume the fair market value of the building is now $750,000 and the fair market value of the land is $1,590,000. The fair market value of the stock remains $1,100,000. What is the corporation’s adjusted basis in each of the assets received in the exchange?(Do not round intermediate calculations.)
A Corporation owns 20% of C Corporation. C has current earnings and profits of $40,000. C distributed property with a basis of $65,000 and a Fair Market Value of $35,000 to A Corporation. The property is subject to a liability of $70,000. Question What are the tax consequences to A and to the C Corporation?
Please help me
None
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Incorporated (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet: Adjusted FMV Таx Basis Appreciation $ 165,000 33,000 $ 165,000 16,500 Cash Building 16,500 132,000 66,000 $ 247,500 Land 66,000 $ 330,000 $ 82,500 Total Under the terms of the agreement, Shauna will receive the $165,000 cash in exchange for her 50 percent interest in WFI. Shauna's tax basis in her WFI stock is $41,250. Danielle will receive the building and land in exchange for her 50 percent interest in WFI. Danielle's tax basis in her WFI stock is $82,500. 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 on gain recognized as a result of the liquidation. (Negative amounts should be indicated by a minus sign.) c. What amount of gain or loss does…
A corporation loses $150,000 from operations. It receives $200,000 in dividend s from a 20%- owned corporation. Required: 1) compute taxable income before deduction for dividend received; 2) compute the full dividend received deduction; 3) compute taxable income after the dividend- received ; 4) compute NOL ( if applicable).
I need help with question
(J)
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 bases: Inventory Building Land Total FMV 88,000 660,000 1,012,000 $1,760,000 $ Adjusted Basis 44,000 440,000 1,320,000 $1,804,000 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 $1,660,000. 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.)