Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $275,000 in return...
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Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $275,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: Adjusted Tax Basis Building Land Total FMV $ 103,125 240,625 $ 27,500 110,000 $ 343,750 $ 137,500 To equalize the exchange, Wiley Corporation paid Hermione $68,750 in addition to her stock. Required: a. What amount of gain or loss does Ramona realize on the formation of the corporation? What amount, if any, does Ramona recognize? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. b. What is Ramona's tax basis in the stock received in return for the contribution of property to the corporation? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. c. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. d. What is Hermione's tax basis in the stock received in return for the contribution of property to the corporation? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. e. What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. Prey 1 of 2 Next f. Assume Hermione's adjusted tax basis in the land was $275,000. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. g. Assume Hermione's adjusted tax basis in the land was $275,000. What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. h. Assume Hermione's adjusted tax basis in the land was $343,750. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. i. Assume Hermione's adjusted tax basis in the land was $343,750. What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. j. Assume Hermione's adjusted tax basis in the land was $343,750. What election can Hermione and Wiley Corporation make to allow Wiley Corporation to take a carryover basis in the land? Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $275,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: Adjusted Tax Basis Building Land Total FMV $ 103,125 240,625 $ 27,500 110,000 $ 343,750 $ 137,500 To equalize the exchange, Wiley Corporation paid Hermione $68,750 in addition to her stock. Required: a. What amount of gain or loss does Ramona realize on the formation of the corporation? What amount, if any, does Ramona recognize? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. b. What is Ramona's tax basis in the stock received in return for the contribution of property to the corporation? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. c. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. d. What is Hermione's tax basis in the stock received in return for the contribution of property to the corporation? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. e. What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. Prey 1 of 2 Next f. Assume Hermione's adjusted tax basis in the land was $275,000. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. g. Assume Hermione's adjusted tax basis in the land was $275,000. What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. h. Assume Hermione's adjusted tax basis in the land was $343,750. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. i. Assume Hermione's adjusted tax basis in the land was $343,750. What adjusted tax basis does Wiley Corporation take in the land and building received from Hermione? Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. j. Assume Hermione's adjusted tax basis in the land was $343,750. What election can Hermione and Wiley Corporation make to allow Wiley Corporation to take a carryover basis in the land?
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a Ramona realizes a gain on the formation of the corporation which is calculated as the fair market value FMV of her cash contribution minus her adjus... View the full answer
Related Book For
Taxation Of Individuals And Business Entities 2015
ISBN: 9780077862367
6th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
Posted Date:
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