Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to 100 percent of the corporation's stock. The property transferred to the corporation had the fo and adjusted tax bases: Adjusted Tax FMV Basis Inventory Building $ 56,000 420,000 $ 28,000 280,000 644,000 840,000 $ 1,148,000 Land Total $ 1,120,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. Th corporation's stock received in the exchange was $1,020,000. The transaction met the requir under §351. (Negative amount should be indicated by a minus sign. Leave no answer blanl

Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to 100 percent of the corporation's stock. The property transferred to the corporation had the fo and adjusted tax bases: Adjusted Tax FMV Basis Inventory Building $ 56,000 420,000 $ 28,000 280,000 644,000 840,000 $ 1,148,000 Land Total $ 1,120,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. Th corporation's stock received in the exchange was $1,020,000. The transaction met the requir under §351. (Negative amount should be indicated by a minus sign. Leave no answer blanl

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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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…
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Subject : Accounting
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…
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Macedonia Corporation distributes Land (Adjusted Basis of $120,000 and Fair Market Value of $200,000) as a Property Dividend to its shareholders. The Land is subject to a liability of $250,000. As a result of this distribution, Macedonia Corporation must (has) Recognized Gain of: $130,000. $ 50,000. $ 80,000. $ -0-.
Gg.115.