Question: On April 1 2016 Bullen Company transferred machinery used in
On April 1, 2016, Bullen Company transferred machinery used in its business to Eaton Inc. in exchange for Eaton common stock. Both Bullen and Eaton use the calendar year for tax purposes. Bullen’s exchange of property for stock qualified as a nontax-able exchange under Section 351. Consequently, Bullen’s adjusted tax basis in the machinery carried over to become Eaton’s tax basis. Bullen purchased the machinery in 2014 for $413,000 cash. The machinery was seven-year recovery property, and Bullen deducted a total of $160,161 MACRS depreciation in 2014 and 2015. Compute the 2016 MACRS depreciation deduction with respect to the machinery allowed to Bullen Company and to Eaton Inc.
Relevant QuestionsFirm NS owns 90 percent of Corporation T’s outstanding stock. NS also owns business realty that T needs for use in its business. The FMV of the realty is $4 million, and NS’s adjusted basis is $5.6 million. Both NS and T ...LN Consulting is a calendar year, cash basis unincorporated business. The business is not required to provide audited financial statements to any external user. LN’s accounting records show the following: Cash receipts: ...This year, Mr. Pitt’s sole proprietorship generated a $17,000 net loss. Can Mr. Pitt use this loss as an net operating loss carryback deduction? AB Corporation and YZ Corporation formed a partnership to construct a shopping mall. AB contributed $500,000 cash and YZ contributed land ($500,000 FMV and $430,000 basis) in exchange for a 50 percent interest in ABYZ ...AV Inc. is a member of an LLC. This year, AV received a Schedule K-1 reporting a $1,200 share of capital loss and a $4,000 share of Section 1231 gain. During the year, AV recognized a $5,000 capital loss on the sale of ...
Post your question