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: Adjusted Tax FMV Basis $ 28,000 280,000 840,000 $ 1,148,000 Inventory Building $ 56,000 420,000 $ Land 644,000 $ 1,120,000 Total 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 $1,020,000. 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 $1,220,000 attached to the building and land. Assume the fair market value of the building is now $700,000 and the fair market value of the land is $1,484,000. The fair market value of the stock remains $1,020,000. g. What is the corporation's adjusted tax basis in each of the assets received in the exchange? (Do not round intermediate calculations.)

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: Adjusted Tax FMV Basis $ 28,000 280,000 840,000 $ 1,148,000 Inventory Building $ 56,000 420,000 $ Land 644,000 $ 1,120,000 Total 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 $1,020,000. 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 $1,220,000 attached to the building and land. Assume the fair market value of the building is now $700,000 and the fair market value of the land is $1,484,000. The fair market value of the stock remains $1,020,000. g. What is the corporation's adjusted tax basis in each of the assets received in the exchange? (Do not round intermediate calculations.)

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

Parent Corporation purchased 80 percent of the stock of Subsidiary Corporation in one transaction for $200,000. The remaining 20 percent is owned by the MAC partnership. Subsidiary's only asset is an office building depreciated on the straight-line method, with an adjusted basis of $50,000 and a value of $400,000. It is subject to a mortgage of $140,000. a. If Parent makes a Code Sec. 338 election, what are the tax consequences to Parent, Subsidiary and MAC? b. If Parent does not make a Code Sec 338 election and liquidates Subsidiary under the Code Sec. 332, what are the tax consequences to Parent, Subsidiary, and MAC?
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: FMV Adjusted Tax Basis Appreciation (Depreciation) Cash $ 343,500 $ 343,500 Building 65,500 22,250 43,250 Land 278,000 377,500 (99,500) Total $ 687,000 $ 743,250 $ (56,250) Under the terms of the agreement, Tiffany will receive the $343,500 cash in exchange for her 50 percent interest in ROF. Tiffany's tax basis in her ROF stock is $67,500. Carlos will receive the building and land in exchange for his 50 percent interest in ROF. His tax basis in the ROF stock is $142,500. 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.) a. What…
Hansaben
[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 Adjusted Tax Basis $ 34,000 340,000 1,020,000 FMV $ 68,000 510,000 782,000 $ 1,360,000 $ 1,394,000 Total 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? Adjusted basis Land $
2. 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: FMV Adjusted Tax Basis Inventory $ 10,000 $ 4,000 Building 50,000 30,000 Land 100,000 50,000 Total $ 160,000 $ 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. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) What amount of gain or loss does Ramon recognizeon the transfer of the property to his corporation?
Tesla Incorporated and BMW Company entered into an exchange of real property. Here is the information for the properties to be exchanged. Tesla: FMV $800,000 Adjustasted tax basis $600,000 Mortgage $ 170,000 BMW: FMV $715,000 Adjustasted tax basis $500,000 Mortgage $0 Pursuant to the exchange, BMW assumed the mortgage on the Teslas property. Compute Tesla's tax basis in the property received from BMW.
C Corporation converts to S Corporation when the fair market value of its assets was $100,000 and its basis of those assets was $60,000. Three years later, S Corporation sells those assets for $120,000. What amount of built in gain is subject to S corporation tax at the date of sale?
Father owns 40 % of Family Corporation (FC ) Son owns 30 % of FC and Daughter owns 30 % of FC (Father's 2 children are Son and Daughter) Father wants to retire and have Son and Daughter each own 50 % of FC Son and Daughter do not have enough money to buy Father's shares Father insists that the results of the transaction generate a capital gain for him rather than dividend income (Father has a high basis in FC shares.) You suggest that the FC reddem all of Father's shares of FC Which of the following statements is correct? O A. Because a redemption is the sale of shares to a Corporation, it will alaways result in a capital gain B. II Father becomes Chairman of the Board and President of FC after the redemption, Capital gain treatment will be available if the family attribution rules are waived OC. The redemption of all of Father's shares will result in capital gain treatment because it qualifies as a substantially disproportionate redemption OD. The redemption of all of Father's shares…
Dhapa
1. Blue Corporation distributes land and building having a $70,000 adjusted basis and a $200,000 FMV to its sole shareholder, Marina. Blue has current and accumulated E&P exceeding $200,000. The property is subject to a $120,000 mortgage, which Marina assumes. What is the amount of the taxable dividend received by Marina? Group of answer choices $80,000 $70,000 $0 $130,000
Castle and Dave formed an S corporation that is owned as follows: Castle 75% and Dave 25%. The corporation distributes an asset to each owner. The corporation has a basis of $45,000 for each asset. The fair market value of each of the assets is as follows: Castle $90,000 and Dave $50,000. a. What is the recognized gain for the corporation? b. How much of the gain does Castle report? c. How much of the gain does Dave report?
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…