Question

Please answer Fully and show work 25. Harrison and Julia form Iris Corporation. Harrison transfers property...

Please answer Fully and show work

25. Harrison and Julia form Iris Corporation. Harrison transfers property (basis of $400,000

and fair market value of $300,000) while Julia transfers land of $150,000 and fan

market value of $280,000) and $20,000 of cash. Each receives 50% of Ins s stock. As a

result of these transfers:

aHarrison has a recognized loss of $l00,000, and Julia has a recognize d gain of

$130,000.

B Neither Harrison nor Julia has any recognized gain or loss.

C Harrison has no recognized loss, but Julia has a recognized gain of $l30,0 00

D Iris Corporation will have a basis in the land of $280,000.

E None of the above.

26. Phillip transfers land worth $300,000, basis of $200,000, to a newly fonded corporation,

Peony Corporation, for all of Peony's stock, worth $250,000, and a 10-year note. The

note was executed by Peony and made payable to Phillip in the amount of $50,000. As a

result of the transfer:

a Phillip does not recognize gain.

B Phillip recognizes gain of $50,000.

C Peony Corporation has a basis of $200,000 in the land.

d. Peony Corporation has a basis of $300,000 in the land.

e. None of the above.

Homework Answers

Answer #1

Part 25:

Option B

B Neither Harrison nor Julia has any recognized gain or loss.

Harrison transfers property to Iris Corporation solely in exchange of stocks and he is in “control” immediately after exchange. Thus, according to section 351, no gain or loss should be recognized for this transfer.

Julia transfers property to Iris Corporation solely in exchange of stocks and she is in “control” immediately after exchange. Thus, according to section 351, no gain or loss should be recognized for this transfer.

Part 26:

Option D

d. Peony Corporation has a basis of $300,000 in the land.

As for the transfer of land, Peony corporation paid stock worth $250000+notes payable $50000 = $300000

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Harrison and Julia form Iris Corporation. Harrison transfers property (basis of $400,000 and fair market value...
Harrison and Julia form Iris Corporation. Harrison transfers property (basis of $400,000 and fair market value of $300,000) while Julia transfers land (basis of $150,000 and fair market value of $280,000) and $20,000 of cash. Each receives 50% of Iris’s stock. As a result of these transfers: a. Harrison has a recognized loss of $100,000, and Julia has a recognized gain of $130,000. b. Neither Harrison nor Julia has any recognized gain or loss. c. Harrison has no recognized loss,...
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...
Question 35 Dicky, Bev and Mollie form Murphy Corporation. Dicky transfers land worth $80,000 (adjusted basis...
Question 35 Dicky, Bev and Mollie form Murphy Corporation. Dicky transfers land worth $80,000 (adjusted basis is $25,000) for 80 shares, Mollie transfers $40,000 cash for 40 shares and Bev transfers equipment worth $40,000 (adjusted basis is $16,000) and $40,000 of services for 80 shares. Bev’s tax consequences are: A.         $64,000 recognized gain; basis in 80 shares of $80,000 B.         $40,000 recognized gain; basis in 80 shares of $56,000 C.          $24,000 recognized gain; basis in 80 shares of $40,000...
Carl transfers land to Cardinal Corporation for 90% of the stock in Cardinal Corporation worth $60,000...
Carl transfers land to Cardinal Corporation for 90% of the stock in Cardinal Corporation worth $60,000 and the assumption by Cardinal of a mortgage on the land in the amount of $100,000. The land, which has a basis to Carl of $70,000, is worth $160,000.    Required: 1. Determine the amount of gain or loss, if any, that Carl must recognize. 2. Determine Carl’s basis in his shares of Cardinal Corporation stock. Show your work. 3. Determine Cardinal’s basis in...
Problem 18-31 (Algorithmic) (LO. 1, 3 ) Ann and Bob form Robin Corporation. Ann transfers property...
Problem 18-31 (Algorithmic) (LO. 1, 3 ) Ann and Bob form Robin Corporation. Ann transfers property worth $315,000 (basis of $110,250) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $126,000 (basis of $25,200) and for legal services (worth $12,600) 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...
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...
Problem 11-12 Corporate Formation (LO 11.7) Karen, in forming a new corporation, transfers land to the...
Problem 11-12 Corporate Formation (LO 11.7) Karen, in forming a new corporation, transfers land to the corporation in exchange for 100 percent of the stock of the corporation. Karen's basis in the land is $275,000, and the corporation assumes a liability on the property in the amount of $300,000. The stock received by Karen has a fair market value of $550,000. If an amount is zero, enter "0". a. What is the amount of gain or loss that must be...
12. Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions, Inc. (WFI). After...
12. Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions, Inc. (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet.                                                        FMV         Adjusted Basis          Appreciation             Cash                          $  200,000     $     200,000             Building                           50,000               10,000                       40,000             Land                               150,000            100,000                      50,000             Total                           $  400,000     $     310,000              $    90,000 Under the terms of the agreement, Shauna will receive the $200,000 cash in exchange for her 50 percent interest in WFI. Shauna’s tax basis in her WFI stock is $60,000. Danielle will receive the building and land...
A. Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions, Inc. (WFI). After...
A. Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions, Inc. (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet.                                                        FMV         Adjusted Basis          Appreciation             Cash                          $  200,000     $     200,000             Building                           50,000               10,000                       40,000             Land                               150,000             95,000                      55,000             Total                           $  400,000     $     305,000              $    95,000           Under the terms of the agreement, Shauna will receive the $200,000 cash in exchange for her 50 percent interest in WFI. Shauna’s tax basis in her WFI stock is $55,000. Danielle will receive the building and land...
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions, Inc. (WFI). After liquidating...
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions, Inc. (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet.                                                        FMV         Adjusted Basis          Appreciation             Cash                          $ 200,000     $     200,000             Building                           50,000               10,000                       40,000             Land                               150,000               85,000                       65,000             Total                           $  400,000     $     295,000              $    105,000           Under the terms of the agreement, Shauna will receive the $200,000 cash in exchange for her 50 percent interest in WFI. Shauna’s tax...