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 Appreciation (Depreciation) FMV Таx Basis $ 275,500 73,000 202,500 $ 551,000 $ 275,500 25,250 Cash Building 255,000 $ 555,750 47,750 (52,500) $ (4,750) Land Total Under the terms of the agreement, Tiffany will receive the $275,500 cash in exchange for her 50 percent interest in ROF. Tiffany's tax basis in her ROF stock is $56,500. Carlos will receive the building and land in exchange for his 50 percent interest in ROF. His tax basis in the ROF stock is $133,500. 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.) d. What is Carlos's adjusted tax basis in the building and land after the complete liquidation? Building Land 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: Adjusted Appreciation (Depreciation) FMV Таx Basis $ 275,500 73,000 202,500 $ 551,000 $ 275,500 25,250 Cash Building 255,000 $ 555,750 47,750 (52,500) $ (4,750) Land Total Under the terms of the agreement, Tiffany will receive the $275,500 cash in exchange for her 50 percent interest in ROF. Tiffany's tax basis in her ROF stock is $56,500. Carlos will receive the building and land in exchange for his 50 percent interest in ROF. His tax basis in the ROF stock is $133,500. 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.) d. What is Carlos's adjusted tax basis in the building and land after the complete liquidation? Building Land Tax basis

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

8 D es Required information [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: Cash Building Land Total FMV Adjusted Tax Basis $ 200,000 $ 200,000 50,000 150,000 10,000 200,000 $ 400,000 $ 410,000 Appreciation (Depreciation) Gain or loss recognized 40,000 (50,000) $ (10,000) Under the terms of the agreement, Tiffany will receive the $200,000 cash in exchange for her 50 percent interest in ROF. Tiffany's tax basis in her ROF stock is $50,000. Carlos will receive the building and land in exchange for his 50 percent interest in ROF. His tax basis in the ROF stock is $100,000. 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 on gain recognized…
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…
Eleven years ago, Lynn, Incorporated purchased a warehouse for $315,000. This year,the corporation sold the warehouse to Firm D for $80,000 cash and D’s assumption ofa $225,000 mortgage. Through date of sale, Lynn deducted $92,300 straight-linedepreciation on the warehouse.Requiredc. How would your answers change if Lynn was a noncorporate business?
jagdish
The Walston Company is to be liquidated. It has the following liabilities: Income taxes Notes payable (secured by land) Accounts payable Salaries payable (evenly divided between two employees) Bonds payable Administrative expenses for liquidation The company has the following assets: $ 7,600 136,000 93,000 14,000 78,000 28,000 Book Value Fair Value Current assets $ 88,000 Land 108,000 Buildings and equipment 108,000 $ 43,000 98,000 132,000 Required: How much money will the holders of the notes payable collect following liquidation? Total amount collected
NEED help with this Question
Required Information Problem 09-59 (LO 09-4) (Algo) [The following information applies to the questions displayed below.] Georgio owns a 10 percent profits and capital interest in Rain Tree LLC. For the current year, Rain Tree had the following revenues, expenses, gains, and losses: Sales revenue Gain on sale of land ($1231) Cost of goods sold Depreciation-MACRS §179 deduction* Employee wages Nondeductible fines and penalties Municipal bond interest Short-term capital gains. Guaranteed payment to Sandra *Assume the §179 property placed in service limitation does not apply. Description Problem 09-59 Part a (Algo) a. How much ordinary business income (loss) is allocated to Georgio for the year? Sales revenue Ordinary Business Income $ 85,000 13,600 (46,750) (4,250) (14,500) Total Amount Allocated to Georgio (20,000) (3,800) 7,300 6,150 (3,700)
55)Grounds for Divorce Coffee Corporation had sales of $3 million this past year. Its cost ofgoods sold was $1.1 million and its operating expenses were $400,000. Interest expenseson outstanding debts were $160,000, and the company paid $40,000 in preferred stockdividends. The company received interest income of $14,000. Determine Grounds’taxable income.
rlock Tutor TutorMe) Ewing Corporation sold an office building that it used in its business for $879,381. Ewing bought the building ten years ago for $779,550 and has claimed $523,412 of depreciation expense. What is the amount of the $1231 capital gain for Ewing Corporation?
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…
(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.)