Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percentof the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted tax bases:InventoryBuildingLandTotalFMV$ 20,000150,000230,000Adjusted TaxBasis$ 10,000100,000300,000$ 400,000$ 410,000The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation'sstock received in the exchange was $300,000. The transaction met the requirements to be tax-deferred under §351.Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.Required:a. What amount of gain or loss does Zhang realize on the transfer of the property to the corporation?b. What amount of gain or loss does Zhang recognize on the transfer of the property to the corporation?c. What is Zhang's tax basis in the stock received in the exchange?d. What is the corporation's adjusted tax basis in each of the assets received in the exchange?e. Assume the corporation assumed a mortgage of $500,000 attached to the building and land. Assume the fair market value of thebuilding is now $250,000 and the fair market value of the land is $530,000. The fair market value of the stock remains $300,000.How much, if any, gain or loss does Zhang recognize on the exchange assuming the revised facts?f. Assume the corporation assumed a mortgage of $500,000 attached to the building and land. Assume the fair market value of thebuilding is now $250,000 and the fair market value of the land is $530,000. The fair market value of the stock remains $300,000.What is Zhang's tax basis in the stock received in the exchange?g. Assume the corporation assumed a mortgage of $500,000 attached to the building and land. Assume the fair market value of thebuilding is now $250,000 and the fair market value of the land is $530,000. The fair market value of the stock remains $300,000.What is the corporation's adjusted tax basis in each of the assets received in the exchange?Note: Do not round intermediate calculations.

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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 Basis Inventory Building Land Total FMV $ 20,000 150,000 230,000 $ 400,000 $ 10,000 100,000 300,000 $410,000 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 $300,000. The transaction met the requirements to be tax-deferred under §351. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Required: a. What amount of gain or loss does Zhang realize on the transfer of the property to the corporation? b. What amount of gain or loss does Zhang recognize on the transfer of the property to the corporation?

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 Basis Inventory Building Land Total FMV $ 20,000 150,000 230,000 $ 400,000 $ 10,000 100,000 300,000 $410,000 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 $300,000. The transaction met the requirements to be tax-deferred under §351. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Required: a. What amount of gain or loss does Zhang realize on the transfer of the property to the corporation? b. What amount of gain or loss does Zhang recognize on the transfer of the property to the corporation?

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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[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 $
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.
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 $ 56,000 420,000 644,000 $ 1,120,000 $ 28,000 280,000 840,000 Inventory Building Land $ 1,148,000 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…
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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?
3. 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 is Ramon’s basis in the stock he receives in his corporation?
Helen owns 30% of a flow-through entity. The capital gain comes from the sale of a piece of equipment that Helen contributed to the entity. At the time of contribution, the piece of equipment had a basis of $45,000 and a fair market value of $50,000. The entity reports the following amounts before any payments to the owners: O/S Item Amount Sales Revenue 30,000 Dividends received 10,000 Tax-exempt interest income 15,000 Capital gain 5,000 Charitable contributions 1,000 Cost of Goods Sold 10,000 General Business Expenses 3,000 a) In the O/S column above, write ‘O’ for any ordinary business items and write ‘S’ for any separately stated items. b) Assume that the entity is an S-Corp, and that Helen is also an employee of the…
Global Corporation distributed property with an $543,000 fair market value and a $298,650 adjusted basis to one of its shareholders. The property was subject to a $164,258 mortgage, which the shareholder assumed. Global has ample E & P to cover any distribution made during the year. What is the amount of the shareholder's dividend income on the distribution? 378,742 What is the shareholder's basis in the property received?
Marie and Ramesh form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $190,800 in exchange for 400 shares of stock. Ramesh contributes an installment note receivable (basis $25,000; fair market value $30,000), land (basis $50,000; fair market value $170,000), and inventory (basis $450,560; fair market value $563,200) in exchange for 1,600 shares. Determine Marie and Ramesh's current income, gain, or loss and calculate the basis that each takes in the Roundtree stock. If an amount is zero, enter "0". Marie has income of $ of stock. Ramesh has income of $ and $ and $ basis in her 400 shares basis in his 1,600 shares of stock.
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…