Carmen and Marc form Apple Carmen transfers land that is Sec. 1231 property, with an adjusted basis of $18,000 and a FMV of $20,000 in exchange for one-half of the Apple Corporation stock. Marc transfers equipment that originally cost $28,000 on which he has taken $5,000 in depreciation deductions. The equipment has a FMV of $25,000 and he receives one-half the stock and a $5,000 short-term note. The transaction meets the requirements of Sec. 351. below is correct?
Max transfers the properties to a corporation for $90,000 of stock and $10,000 cash in a transaction that qualifies under Sec. 351. Asset One Asset Two Asset Three FMV Basis $30,000 35,000 $45,000 40,000 gain is
Mario and Lupita form a corporation in a transaction coming under Sec. 351. Lupita transfers property with an adjusted basis of $150,000 and a FMV of $200,000 in exchange for one-half of the stock. The property has an $80,000 mortgage, which the corporation assumes. The corporation's basis in the is
Martin operates a law practice as a sole using the cash method of accounting. Martin incorporates the law practice and transfers the following items to a new, solely-owned corporation. Adjusted Basis FMV Cash Equipment Accounts receivable Accounts payable (deductible expenses) Note payable (on equipment) $10,000 80,000 0 0 $ 10,000 100,000 120,000 60,000 a gain of and has a stock basis of
The assignment of income doctrine does not if the transferor in a Sec. 351 exchange in which no gain is otherwise recognized transfers when a sole proprietor transfers substantially all the assets and liabilities of the transferor's trade or business to a controlled corporation. B)
Phil and Nick form Philnick Corporation. Phil exchanges cash and other property for 900 shares (90% of the outstanding shares) of Philnick stock. Nick performs accounting services in exchange for 100 shares of Philnick stock worth $10,000. What are the tax consequences the Philnick Corporation to Phil and Nick?
Tanicia owns all 100 shares of Midwest Corporation's stock, valued at $100,000. Gwen owns property that has a $15,000 adjusted basis and a $100,000 FMV. Gwen contributes the property to Midwest Corporation in exchange for 100 shares of newly issued Midwest stock. Does Section 351 apply to Gwen's exchange? What is the amount of her realized or How much is recognized?
Zoe Ann transfers having a $36,000 adjusted basis and a $70,000 FMV for all 100 shares of Zeema Corporation's stock. Before the transfer, Zoe Ann used the machinery in her business. She originally paid $50,000 for the machinery and claimed $14,000 of depreciation before transferring the machinery. Zoe Ann recaptures no depreciation on the transfer and the recapture potential is transferred to Zeema Corporation. Zeema sells the machine for $66,000 after it had depreciated the an $4,000. What is Zeema's gain on the machine and what is its character?
The City of Seattle gives Dotcom Corporation $120,000 cash and land worth $200,000 to induce it to relocate to Seattle. Dotcom Corporation did not spend the cash during the 12 months following the contribution. What are the tax consequences to Dotcom Corporation with respect to the
Norman transfers that has a $45,000 and a $105,000 FMV and $30,000 in money to Elnor Corporation in exchange for 50 shares of Elnor stock. The machinery, used in Norman's business, originally cost him $150,000 and is subject to a $84,000 liability which Elnor Corporation assumes. Kate exchanges $51,000 cash for the remaining 50 shares of Elnor stock. a. What are the amount and character of Norman's recognized gain or loss? b. What is his basis in the Elnor stock? c. What is basis in the machinery? d. What are the amount and character of Kate's recognized gain or loss? e. What is Kate's basis in the Elnor stock? f. When do Norman and Kate's holding periods for their stock begin? 111)
On April 2 of the current year, Jana transfers land with a basis of $140,000 and a fair market value of $120,000 to Amish Corporation in exchange for all of its stock. She had originally acquired the land on December 1, 2000. What tax issues rise from the exchange? 120)
must pay taxes on $30,000, his 50% share of Museum Corporation's income whether it is distributed to him or not. Museum Corporation pays no corporate income taxes. If Museum Corporation reports a $40,000 loss, Whitney's $20,000 share of the loss reduces his taxable income. 81)
• Does the the Sec. 351 • Has Jana transferred property? • Is Jana in control of the corporation following the transfer? • What is Jana's recognized gain? • What is Jana's basis for her stock? • Should Jana to take a reduced basis in the stock so that Amish will have a $140,000 basis in the land? • What is Jana's holding period for her stock? • Does Amish Corporation recognize gain when it issues its stock? • What is Amish Corporation's basis for the property received from Jana? • What is Amish Corporation's holding period for the property received from Jana? The property transfer meets all the Sec. 351 requirements. Neither Jana nor Amish will have gain or loss on the exchange. Jana can elect to take a basis of $120,000 in the Amish stock and Amish will have a $140,000 basis in the land. If no election is made, Amish will have a basis of $120,000 in the land and Jana's basis in the stock is $140,000. If Amish has a basis of $120,000 in the land, its holding period for the land will begin on the day after the exchange. If Amish takes Jana's basis of $140,000 and Jana reduces her basis in the stock, Amish's holding period for the land begins on December 2, 2000. Jana's holding period for the stock includes the period for which she held the land. 120)