Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the 100 percent of the corporation's stock. The property transferred to the corporation had the follow and adjusted tax bases: Adjusted Tax Basis $ 28,000 280,000 FMV Inventory Building Land $ 56,000 420,000 644,000 $ 1,120,000 840,000 $ 1,148,000 Total The corporation also assumed a mortgage of $100,000 attached to the building and land. The fa corporation's stock received in the exchange was $1,020,000. The transaction met the requireme under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Er me the corporation assumed a mortgage of $1,220,000 attached to the building and land. Assume ng is now $700,000 and the fair market value of the land is $1,484,000. The fair market value of tl

Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the 100 percent of the corporation's stock. The property transferred to the corporation had the follow and adjusted tax bases: Adjusted Tax Basis $ 28,000 280,000 FMV Inventory Building Land $ 56,000 420,000 644,000 $ 1,120,000 840,000 $ 1,148,000 Total The corporation also assumed a mortgage of $100,000 attached to the building and land. The fa corporation's stock received in the exchange was $1,020,000. The transaction met the requireme under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Er me the corporation assumed a mortgage of $1,220,000 attached to the building and land. Assume ng is now $700,000 and the fair market value of the land is $1,484,000. The fair market value of tl

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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Mr. Beaver and Ms. Duck decide to form a new corporation named BD Inc. Mr. Beaver transfers $20,000 cash, equipment (FMV $40,000; adjusted tax basis $41,500) and business inventory ($20,000 FMV; adjusted tax basis $12,000), and Ms. Duck drafts the legal documents and designs the accounting and information systems for BD. These services are valued at $10,000. BD issues 1000 shares of common stock to its two shareholders. a. How many shares should Mr. Beaver and Ms. Duck each receive? Beaver __________ Duck __________ b. Compute Mr. Beaver’s realized and recognized gain on his exchange of property for stock, and determine his tax basis in his BD common shares. Beaver realized gain ______________ Beaver recognized gain ___________ Beaver’s basis in BD stock _________ c. Compute Ms. Duck’s realized and recognized gain on her exchange of services for stock, and determine her tax basis in her BD common shares. Duck realized gain ______________ Duck recognized gain ___________…
Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $300,000 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: FMV Building $112,500 Land 262,500 Total $375,000 Adjusted Tax Basis $30,000 120,000 $150,000 To equalize the exchange, Wiley Corporation paid Hermione $75,000 in addition to her stock. i. Assume Hermione's adjusted tax basis in the land was $375,000. What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione seperately?
5. Carla 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: FMV Adjusted Tax Basis Inventory $ 20,000 $ 10,000 Building 150,000 100,000 Land 250,000 300,000 Total $ 420,000 $ 410,000 The corporation also assumed a mortgage of $120,000 attached to the building and land. The fair market value of the corporation’s stock received in the exchange was $300,000. (Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) What amount of gain or loss does Carla recognizeon the transfer of the property to her corporation?
On January 7, 2021, Martin Corporation acquires two properties from a shareholder solely in exchange for stock in a transaction that qualifies under § 351. The shareholder’s basis, the fair market value, and the built-in gain (loss) of each property are: Martin Corporation Properties Property Shareholder's Basis Fair Market Value Built-in Gain (Loss) Property 1 $300,000 $375,000 $75,000 Property 2 $525,000 $400,000 ($125,000) Net Built-In Loss: ($50,000) Martin adopts a plan of liquidation later in the year and distributes Property 2 to a 30% shareholder when the property is worth $350,000. Compute Martin’s basis in Property 1 and in Property 2 as of January 7, 2021. Compute Martin’s realized and recognized loss on the liquidating distribution of Property 2.
Anji, a resident citizen, realized the following gains from the sale of assets: Capital Gains on sale of shares of a domestic corporation not traded thru PSE (Selling price of P1,120,000, Cost of P1,000,000) - P120,000; Gain on sale of shares of a domestic corporation sold in the PSE (Selling Price of P115,000, Cost of P90,000) - P25,000; Gain on sale of real property located in the Philippines (Selling price P2,000,000, FMV P3,000,000;)- P500,000; Gain on sale of real property abroad (Selling price of P2,000,000, Cost of P1,700,000) - P300,000; How much is the total capital gains tax?
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 60,000 $ 30,000 Inventory Building Land Total 450,000 690,000 $1,200,000 300,000 900,000 $1,230,000 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 $1,100,000. 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.) 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. e. How…
Corporation Compute the amount of charitable contribution deduction for the current year for the following taxpayers. Ignore any percentage limitations. a. Pritizo Corporation owns inventory with a basis of $30,000 and a fair market value of $24,000. A charitable contribution of the Inventory results in a deduction of $S b. During the current year, Lasso Corporation donates a capital asset to Midlands College. Lasso acquired the asset three years ago for $18,000, and the fair market value on the date of the contribution is $32,000. The corporation's charitable contribution deduction is c. Nate Corporation donates a sculpture worth $130,000 to a local museum (a qualified organization), which exhibits the sculpture. Nate had acquired the sculpture in 2005 for $55,000. Nate is allowed to deduct $ Previous Subm Emtal thsfreuctar
3) Esme transfers land with a FMV of $900,000 to a newly formed corporation in exchange for all the stock. The land has a basis of $400,000 and debt of $600,000. The basis of the land for Esme is:
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.)
(1) DEF Corporation distributes a building to Jones, an individual and fifty (50) percent shareholder. The building has a FMV of $50,000 and an adjusted basis of $32,000. Without considering the distribution of the building to Jones, DEF Corporation had earnings and profits of $26,500. Jones adjusted basis in his interest in DEF Corporation was equal to $15,000. (a) What is the amount of the section 301 distribution to Jones? (b) What is Jones' basis in the building following its distribution to Jones? (c) What is the amount of gain recognized by DEF Corporation as a result of the distribution of the building to Jones? (d) What is the character of the distribution to Jones and what is the amount of DEF's earnings and profits following the distribution?
Which of the following assets is NOT subject to capital gains tax? Select one: Shares acquired in October 1985 and sold for profit in 2020 Rare coin acquired for $550 and sold for $1,000 Sale of the tax payer's main residence All of the options will attract CGT Canoe acquired for $12,000 and sold for $15,000
Mr. Beaver and Ms. Duck decide to form a new corporation named BD Inc. Mr. Beaver transfers $20,000 cash, equipment (FMV $40,000; adjusted tax basis $41,500) and business inventory ($20,000 FMV; adjusted tax basis $12,000), and Ms. Duck drafts the legal documents and designs the accounting and information systems for BD. These services are valued at $10,000. BD issues 1000 shares of common stock to its two shareholders. d. Determine BD Inc.’s book and tax basis in the inventory and equipment transferred by Mr. Beaver and the book and tax basis of the services (before they are expensed/amortized as organization and startup costs) performed by Ms. Duck. Book basis of inventory____________________________ Tax basis of inventory _____________________________ Book basis of equipment____________________________ Tax basis of equipment______________________________ Book basis of organization and startup costs ______________ Tax basis of organization and startup costs________________