Homework Answers
Please find below the solution....
Solution is in sequence
| Marie | ||||
| a | Net income = | 92400 | ||
| b | Basis = | 92400 | ||
| Ethan | ||||
| c | Net income = | 0 | ||
| d | Basis = | 210680 | =(25000+50000+135680) | |
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Exercise 18-19 (Algorithmic) (LO. 1) Marie and Ethan form Roundtree Corporation with the transfer of the...
Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services...
Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $160,800 in exchange for 400 shares of stock. Ethan 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 $354,560; fair market value $443,200) in exchange for 1,600 shares. Determine Marie and Ethan's current income, gain, or loss and calculate the basis that each...
Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services...
Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $144,000 in exchange for 400 shares of stock. Ethan 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 $300,800; fair market value $376,000) in exchange for 1,600 shares. Determine Marie and Ethan's current income, gain, or loss and calculate the basis that each...
Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services...
Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $176,400 in exchange for 400 shares of stock. Ethan 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 $404,480; fair market value $505,600) in exchange for 1,600 shares. Determine Marie and Ethan's current income, gain, or loss and calculate the basis that each...
Exercise 18-21 (Algorithmic) (LO. 2) Jocelyn contributes land with a basis of $29,000 and fair market...
Exercise 18-21 (Algorithmic) (LO. 2) Jocelyn contributes land with a basis of $29,000 and fair market value of $43,500 and inventory with a basis of $15,400 and fair market value of $23,100 in exchange for 100% of Zion Corporation stock. The land is subject to a $7,250 mortgage Determine Jocelyn's recognized gain or loss and the basis in the Zion stock received If an amount is zero, enter "O". The exchange istax-free under $ 351 because the release of a...
Problem 18-31 (Algorithmic) (LO. 1, 3) Ann and Bob form Robin Corporation. Ann transfers property worth...
Problem 18-31 (Algorithmic) (LO. 1, 3) Ann and Bob form Robin Corporation. Ann transfers property worth $322,500 (basis of $112,875) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $129,000 (basis of $25,800) and for legal services (worth $12,900) in organizing the corporation. If there is no gain or loss, enter "0" for the amount. a. What gain or income, if any, will the parties recognize on the transfer? Ann recognizes of $ Bob recognizes of...
Exercise 19-21 (Algorithmic) (LO. 1) At the beginning of the year, Myrna Corporation (a calendar year...
Exercise 19-21 (Algorithmic) (LO. 1) At the beginning of the year, Myrna Corporation (a calendar year taxpayer) has E & P of $53,400. The corporation generates no additional E & P during the year. On December 31, the corporation distributes $80,100 to its sole shareholder, Abby, whose stock basis is $16,020. How is the distribution treated for tax purposes? If an amount is zero, enter "O" As a result the distribution Abby has the following: Dividend income: $ Return of...
Eva and Juliet form a corporation Eva contributes land ( a capital asset) with a fair...
Eva and Juliet form a corporation Eva contributes land ( a capital asset) with a fair market value of $75,000 and a tax basis of $30,000 and receives 75 shares of EJ Inc. Juliet performs services worth $25,000 and receives 25 shares of EJ Inc. What gain or income will Eva and Juliet recognize as a result of this transaction Eva O A. Neither Eva nor Juliet recognize any gain or income O B. Eva recognizes a $40,000 capital gain...
Exercise 21-22 (Algorithmic) (LO. 10) On June 1 of the current tax year, Elisha and Ezra...
Exercise 21-22 (Algorithmic) (LO. 10) On June 1 of the current tax year, Elisha and Ezra (who are equal partners) contribute property to form the Double E Partnership. Elisha contributes cash of $348,480. Erra contributes a building and land with an adjusted basis and fair market value of $580,800, subject to a liability of $232,320. The partnership borrows $36,300 to finance construction of a parking lot in front of the building. At the end of the first year (December 31),...
Exercise 22-15 (Algorithmic) (LO. 10) Matulis, Inc., a C corporation, owns a single asset with a...
Exercise 22-15 (Algorithmic) (LO. 10) Matulis, Inc., a C corporation, owns a single asset with a basis of $446,400 and a fair market value of $1,071,360. Matulis elects S corporation status. Matulis holds a positive E & P balance. The entity elects S corporation status for 2019 and then sells the asset. Compute the corporate-level built-in gains tax that must be paid by Matulis. If required, round your answer to the nearest dollar.
Exercise 22-15 (Algorithmic) (LO. 10) Matulis, Inc., a C corporation, owns a single asset with a...
Exercise 22-15 (Algorithmic) (LO. 10) Matulis, Inc., a C corporation, owns a single asset with a basis of $340,800 and a fair market value of $817,920. Matulis elects S corporation status. Matulis holds a positive E & P balance. The entity elects S corporation status for 2020 and then sells the asset. Compute the corporate-level built-in gains tax that must be paid by Matulis. If required, round your answer to the nearest dollar.
Exercise 18-21 (Algorithmic) (LO. 2) Jocelyn contributes land with a basis of $29,000 and fair market value of $43,500 and inventory with a basis of $15,400 and fair market value of $23,100 in exchange for 100% of Zion Corporation stock. The land is subject to a $7,250 mortgage Determine Jocelyn's recognized gain or loss and the basis in the Zion stock received If an amount is zero, enter "O". The exchange istax-free under $ 351 because the release of a...
Problem 18-31 (Algorithmic) (LO. 1, 3) Ann and Bob form Robin Corporation. Ann transfers property worth $322,500 (basis of $112,875) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $129,000 (basis of $25,800) and for legal services (worth $12,900) in organizing the corporation. If there is no gain or loss, enter "0" for the amount. a. What gain or income, if any, will the parties recognize on the transfer? Ann recognizes of $ Bob recognizes of...
Exercise 19-21 (Algorithmic) (LO. 1) At the beginning of the year, Myrna Corporation (a calendar year taxpayer) has E & P of $53,400. The corporation generates no additional E & P during the year. On December 31, the corporation distributes $80,100 to its sole shareholder, Abby, whose stock basis is $16,020. How is the distribution treated for tax purposes? If an amount is zero, enter "O" As a result the distribution Abby has the following: Dividend income: $ Return of...
Eva and Juliet form a corporation Eva contributes land ( a capital asset) with a fair market value of $75,000 and a tax basis of $30,000 and receives 75 shares of EJ Inc. Juliet performs services worth $25,000 and receives 25 shares of EJ Inc. What gain or income will Eva and Juliet recognize as a result of this transaction Eva O A. Neither Eva nor Juliet recognize any gain or income O B. Eva recognizes a $40,000 capital gain...
Exercise 21-22 (Algorithmic) (LO. 10) On June 1 of the current tax year, Elisha and Ezra (who are equal partners) contribute property to form the Double E Partnership. Elisha contributes cash of $348,480. Erra contributes a building and land with an adjusted basis and fair market value of $580,800, subject to a liability of $232,320. The partnership borrows $36,300 to finance construction of a parking lot in front of the building. At the end of the first year (December 31),...
Exercise 22-15 (Algorithmic) (LO. 10) Matulis, Inc., a C corporation, owns a single asset with a basis of $446,400 and a fair market value of $1,071,360. Matulis elects S corporation status. Matulis holds a positive E & P balance. The entity elects S corporation status for 2019 and then sells the asset. Compute the corporate-level built-in gains tax that must be paid by Matulis. If required, round your answer to the nearest dollar.
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