On March 1 of the current year, Alice, Bob, Carla, and Dick form Bear Corporation and transfer
Question:
Property Transferred
Alice purchased the land and building several years ago for $12,000 and $50,000, respectively. Alice has claimed straight-line depreciation on the building. Bob also receives a Bear note for $10,000 due in three years. The note bears interest at the prevailing market rate. Bob purchased the equipment three years ago for $50,000. Carla also receives $5,000 cash. Carla purchased the van two years ago for $20,000.
a. Does the transaction satisfy the requirements of Sec. 351?
b. What are the amount and character of the gains or losses recognized by Alice, Bob, Carla, Dick, and Bear?
c. What is each shareholders basis in his or her Bear stock? When does the holding period for the stock begin?
d. What is Bears basis in its property and services? When does the holding period for each property begin?
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson