Ed is considering incorporating his T shirt shop. He is concerned with the potential liability for the
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Question:
Ed is considering incorporating his T shirt shop. He is concerned with the potential liability for the shop's obligations in case he encounters financial difficulties in the future. Ed realizes that if he incorporates the shop, he will be liable only for the debts of the business he personally guaranteed. If Ed incorporates, the following assets will be transferred to the corporation:
Tax Basis Fair Mkt Value
Cash $ $
Furnfixtures
Landbuilding
Ed will receive all of the stock after the corporation is formed in exchange for the assets. Without the recognition provisions of S what would be the taxable gain Ed would recognize? Under S however, what gain would Ed recognize? Has Ed's economic status changed?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: