Question

Angie and Brad form Cats Are Us, Inc. Angie contributes $120,000 cash for 60% of the...

Angie and Brad form Cats Are Us, Inc. Angie contributes $120,000 cash for 60% of the stock. Brad contributes an asset with an FMV of $90,000 and an adjusted basis of $30,000 for 40% of the stock. Brad also receives $10,000 cash from the corporation. What is the corporation's basis in the asset received from Brad?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans: whenever an organisation receives any asset contributed by its shareholder its basis would be the basis of shareholder increased by any amount by it on that asset.

Therefore the corporation's basis in the asset received from Brad = $ 30000 +10000

                                                                                             = $ 40000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Joe, Kate, and Lisa form an equal 1/3 each partnership. Joe contributes land FMV of $20,000...
Joe, Kate, and Lisa form an equal 1/3 each partnership. Joe contributes land FMV of $20,000 (basis $15,000) and land was a Section 1231 asset previously. Kate contributes inventory FMV $10,000 (basis $7,500) and cash of $10,000. Lisa contributes equipment that she has depreciated over the past two years in an unrelated business. She bought the equipment for $24,000 and has taken $12,000 in depreciation. The FMV of it is $20,000 at the time of her contribution. What basis and...
19. Shaquille transfers two assets to a newly-created corporation. The first asset has an adjusted basis...
19. Shaquille transfers two assets to a newly-created corporation. The first asset has an adjusted basis of $40,000 and an FMV of $50,000. The second asset has an adjusted basis of $35,000 and an FMV of $25,000. Shaquille receives stock with an FMV of $66,000 and $9,000 cash. Shaquille must recognize a gain of A) $4,000. B) $5,000. C) $6,000. D) $7,000. 20. Chan transfers property with an adjusted basis of $65,000 and an FMV of $70,000 to Wallis Corporation...
3. Kevin and Lori formed Wonderful Inc., a C-Corporation. Kevin transfers land (FMV $250,000 and adjusted...
3. Kevin and Lori formed Wonderful Inc., a C-Corporation. Kevin transfers land (FMV $250,000 and adjusted basis of 90,000) for 50% of the stock in the corporation and $20,000 cash. Lori transfers equipment (FMV 30,000 adjusted basis of $5,000) and will provide management services worth $200,000 after Wonderful Inc. opens for 50% of the stock in the corporation. (7 points) a. Will the transfer qualify under §351 as a tax free transfer? Explain. b. What are the tax consequences to...
Nina, Gino, and Raina form the Loffredo Corporation. Nina transfers $120,000 cash and inventory worth $130,000...
Nina, Gino, and Raina form the Loffredo Corporation. Nina transfers $120,000 cash and inventory worth $130,000 with a basis of $90,000. Gino transfers land and building worth $250,000 with a basis of $120,000. Raina transfers legal and accounting services to incorporate worth $50,000. Loffredo issues its 500 shares as follows: 250 shares to Nina, 200 shares to Gino, and 50 shares to Raina. In addition, Gino receives $50,000 cash from Loffredo. How much gain (if any) do Nina and Gino...
Noah and Olivia form the Gray Corporation with the following investment. FMV Noah— Cash $180,000 Olivia—...
Noah and Olivia form the Gray Corporation with the following investment. FMV Noah— Cash $180,000 Olivia— Property (basis of $140,000) 200,000 Each received 1,000 shares of Gray stock, but Olivia also receives cash of $20,000. Assume that each share of the Gray stock is worth $180. a. Olivia's recognized gain is b. Olivia's basis in her Gray stock is c. Gray's basis in the property received is
On January 3, 2019, Adam, Brian, Charlie and Dave decide to form XYZ Corp. as a...
On January 3, 2019, Adam, Brian, Charlie and Dave decide to form XYZ Corp. as a vehicle through which they intend to engage in a business.    Adam transfers machinery with a FMV of $90,000 and an adjusted basis in his hands of $105,000 to the corporation in exchange for 100 shares of voting common stock. The machinery was encumbered by a $70,000 liability at the time of the transfer.   Brian contributes a truck with a FMV of $20,000 and an...
On January 3, 2019, Adam, Brian, Charlie and Dave decide to form XYZ Corp. as a...
On January 3, 2019, Adam, Brian, Charlie and Dave decide to form XYZ Corp. as a vehicle through which they intend to engage in a business.   Adam transfers machinery with a FMV of $90,000 and an adjusted basis in his hands of $105,000 to the corporation in exchange for 100 shares of voting common stock. The machinery was encumbered by a $70,000 liability at the time of the transfer.   Brian contributes a truck with a FMV of $20,000 and an...
Assume that Clark, Eric and Emily form another entity, DNA Solutions Inc. that will operate as...
Assume that Clark, Eric and Emily form another entity, DNA Solutions Inc. that will operate as a partnership. Emily contributes $50,000 in cash for her 10% interest in the entity, Eric contributes land with an adjusted basis of $50,000 and a FMV of $200,000 and cash of $25,000 for his 45% interest and Clark contributes equipment with an adjusted basis of $100,000 and a FMV of $200,000 and cash of $25,000 for his 45% interest. DNA Solutions also borrowed a...
Assume that Clark, Eric and Emily form another entity, DNA Solutions Inc. that will operate as...
Assume that Clark, Eric and Emily form another entity, DNA Solutions Inc. that will operate as a partnership. Emily contributes $50,000 in cash for her 10% interest in the entity, Eric contributes land with an adjusted basis of $50,000 and a FMV of $200,000 and cash of $25,000 for his 45% interest and Clark contributes equipment with an adjusted basis of $100,000 and a FMV of $200,000 and cash of $25,000 for his 45% interest. DNA Solutions also borrowed a...
3. Randall owns all the stock of SilverLane, Inc., a C corporation for which his adjusted...
3. Randall owns all the stock of SilverLane, Inc., a C corporation for which his adjusted basis is $225,000. Randall founded SilverLane 12 years ago. The assets and liabilities of SilverLane are recorded as follows. Assets Basis FMV Cash $ 15,000 $ 15,000 Accounts receivable –0– 25,000 Inventory 30,000 35,000 Machinery and equipment* 70,000 90,000 Land 60,000 150,000 $175,000 $315,000 Liabilities Basis FMV Accounts payable $ 5,000 $ 5,000 Notes payable 10,000 10,000 $15,000 $15,000 ? *Accumulated depreciation of $55,000...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT