[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 for100 percent of the corporation's stock. The property transferred to the corporation had the following fair market valuesand adjusted tax bases:InventoryBuildingLandAdjusted TaxBasis$ 34,000340,0001,020,000FMV$ 68,000510,000782,000$ 1,360,000$ 1,394,000TotalThe corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of thecorporation's stock received in the exchange was $1,260,000. The transaction met the requirements to be tax-deferredunder §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)Problem 08-40 Part d (Algo)d. What is the corporation's adjusted tax basis in each of the assets received in the exchange?Adjusted basisLand$

Adjusted basis is the net cost of an item or an asset after making all the adjustments relating to…

[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 $ 68,000 510,000 782,000 $ 1,360,000 Adjusted Tax Basis $ 34,000 340,000 1,020,000 $ 1,394,000 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 $1,260,000. 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?

[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 $ 68,000 510,000 782,000 $ 1,360,000 Adjusted Tax Basis $ 34,000 340,000 1,020,000 $ 1,394,000 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 $1,260,000. 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?

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 [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
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0 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 $ 32,000 240,000 368,000 $ 640,000 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 $540,000 Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Problem 19-40 Part a (Algo) Adjusted Tax Basis $ 16,000 160,000 480,000 $ 656,000 Gain or loss realized e. What amount of gain or loss does Zhang realize on the transfer of the property to the corporation?
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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
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: Cash Building Land Total FMV $ 347,250 71,250 276,000 $ 694,500 Adjusted Tax Basis $ 347,250 27,000 370,000 $ 744,250 Gain or loss recognized Appreciation (Depreciation) 44,250 (94,000) $ (49,750) Under the terms of the agreement, Tiffany will receive the $347,250 cash in exchange for her 50 percent interest in ROF. Tiffany's tax basis in her ROF stock is $59,250. Carlos will receive the building and land in exchange for his 50 percent interest in ROF. His tax basis in the ROF stock is $141,500. 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.) Assume…
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 $ 30,500 122,000 Building Land $ 381,250 $ 152,500 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 $305,000. g. What adjusted tax basis does Wizard Corporation take in the land and building received from Hermione? Land Building Adjusted tax basis