Question: Mr Bryan Olgivie owned an indoor roller skating rink as a
Mr. Bryan Olgivie owned an indoor roller-skating rink as a sole proprietorship. On April 9, a flood completely destroyed the rink. Mr. Olgivie’s adjusted basis in the rink was $833,400. On May 15, he received a check for $1.1 million from his insurance company in complete settlement of his damage claim. Mr. Olgivie is planning to use the entire insurance settlement to purchase 100 percent of the outstanding stock of IceMagic Inc., a corporation that owns an indoor ice-skating rink. Can he defer the recognition of gain on the involuntary conversion of his roller-skating rink by purchasing the IceMagic stock?
Answer to relevant QuestionsOn February 2, Mr. Eugene Pomeroy transferred all the assets of his sole proprietorship (Pomeroy’s Ski Shop) to a newly created corporation, Pomeroy Ski Inc. In exchange for the business assets, Mr. Pomeroy received all ...DM Inc. incurred a $25,000 net capital loss in 2014 that has carried forward into 2015. During 2015, a hurricane destroyed business assets with a $120,000 basis. DM received a $150,000 insurance reimbursement which it ...Mr. Yang sold his interest in a business to an unrelated purchaser for $500,000 cash. How does Mr. Yang determine his adjusted basis for purposes of computing gain or loss realized on the sale if the business is: a. A sole ...JC recently graduated from veterinary school and opened her own professional practice. This year, her net profit was $32,000. Compute JC’s after-tax income from her practice assuming: a. Her self-employment tax is $4,522, ...This year, individual X and individual Y formed XY Partnership. X contributed $50,000 cash, and Y contributed business assets with a $50,000 FMV. Y’s adjusted basis in these assets was only $10,000. The partnership ...
Post your question