Anna transferred land with an adjusted basis to her of $20,000

$16.00

Description

1. Anna transferred land with an adjusted basis to her of $20,000 and a fair market value of $56,000 to Elm Corporation in exchange for 100% of Elm Corporation’s only class of stock. The land was subject to a liability of $26,000, which Elm assumed for legitimate business purposes. The fair market value of Elm’s stock at the time of the transfer was $30,000. What is the amount of Anna’s recognized gain? Explain.
2. John Smith transferred money and property to Corporation X solely in exchange for stock in X. Immediately after the exchange, John owned 80% of the total combined voting power of all classes of stock entitled to vote and 51% of all other classes of stock. No gain or loss will be recognized by John or X. True or False – explain.
3. If a shareholder of a controlled or solely owned corporation receives no additional shares for a contribution of property to the corporation, the basis of the property received by the corporation is the same as it was to the shareholder. True or False – explain!
4. A corporation’s holding period for an asset received in a nontaxable capital contribution includes the time the asset was held by the transferor. True false – explain!
5. Michael contributes equipment with a $25,000 adjusted basis and a $40,000 FMV to Miller Corporation for 25 of its 50 shares of stock. His son, Michael Jr., contributes $10,000 cash for the remaining 25 Miller shares. What tax issues should Michael and his son consider with respect to the stock acquisitions?

Reviews

There are no reviews yet.

Be the first to review “Anna transferred land with an adjusted basis to her of $20,000”

Your email address will not be published. Required fields are marked *