Question: An individual contributes property with a fair market value in excess of basis to a corporation in exchange for stock. What is the basis of

An individual contributes property with a fair market value in excess of basis to a corporation in exchange for stock. What is the basis of the stock in the hands of the shareholder, and what is the basis of the property contributed in the hands of the corporation?

Step by Step Solution

★★★★★

3.39 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

The shareholders basis in the stock will be equal to the basis of ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

753-B-A-I-T (1829).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

An individual contributes property with a FMV in excess of basis to a corporation in exchange for stock. The property is subject to a mortgage. In each of the following instances, determine the basis...

Q:

Multiple Choice Questions 1. Which of the following statements is correct? a. A calendar year corporation must file its tax return no later than April 15 unless it requests an extension. b. A...

Q:

1.Which of the following items retains its character when passed through to share-holders of an S corporation? a. Wages paid b. Accelerated depreciation c. Net long-term capital gains d. Advertising...

Q:

PLEASE PROVIDE ANSWERS EACH QUESTION AND NO WRITTEN ANSWERS. Explain the 80% rule as it pertains to the formation of a corporation. An individual contributes property with a fair market value in...

Q:

1.Explain the circumstances in which a corporation can use the accrual basis or the cash basis of accounting. 2.When must a corporate tax return be filed? Can a corporation receive an extension of...

Q:

Individual A ("A"), Individual B ("B"), both calendar year taxpayers, and Corporation C ("C") with a fiscal year end June 30, form Partnership P ("P") on January 1 of Year 1. P manufactured widgets...

Q:

Individual A ("A"), Individual B ("B"), both calendar year taxpayers, and Corporation C ("C") with a fiscal year end June 30, form Partnership P ("P") on January 1 of Year 1. P manufactured widgets...

Q:

ABC Corp is owned 80% by Atlanta Corp and 19% by Bethany. ABC decides to liquidate. How is he liquidation treated for federal income tax purposes? a. Because the requirements of I.R.C. sect 332, are...

Q:

Individual A ("A"), Individual B ("B"), both calendar year taxpayers, and Corporation C ("C") with a fiscal year end June 30, form Partnership P ("P") on January 1 of Year 1. P manufactured widgets...

Q:

Individual A ("A"), Individual B ("B"), both calendar year taxpayers, and Corporation C ("C") with a fiscal year end June 30, form Partnership P ("P") on January 1 of Year 1. P manufactured widgets...

Q:

Explain why pyrrole (PKa ~ 17) is less acidic than cyclopentadiene (PKa = 15) even though nitrogen is considerably more electronegative than carbon.

Q:

Write down your personal evaluation of the movie John Wick.

Q:

Assuming that X is a binomial random variable with n 5 4 and p 5 .7, find the probability for each of the following values of X. a. X 5 2. b. X 5 0. c. X 5 1.

Q:

Inventory is sometimes thought of as a necessary evil. Explain.

Q:

At December 31, 2010, Ambuir Corporation had a future tax liability of $35,000. At December 31, 2011, the future tax liability is $52,000. The corporation's 2011 current tax expense is $53,000. What...

Q:

Sonia Corporation has temporary differences at December 31, 2011, that result in the following balance sheet future tax accounts: Future tax liability, current .......... $38,000 Future tax asset,...

Q:

Using the information from BE18-3, prepare Nilsons journal entry to record 2011 taxes. Assume a tax rate of 25% and that Nilson uses the taxes payable method of accounting for income taxes under PE...

Q:

7:18 PM Thu Aug 4 ... Take Quiz D Question 19 1 pts The following table lists the number of days that five houses had been up for sale, as well as their selling price Days (x) 45 12 3 17 32 20 11 45...

Q:

I need help! A physical therapist wanted to know whether the mean step pulse of men was less Two sample T for Men vs Women than the mean step pulse of women. She randomly selected 55 men and 75 women...

Q:

Finding genes in DNA is a fundamental problem in biology. After all, only a few percent of human DNA actually contains protein-coding genes. Sifting through the more than 3 billion base pairs to find...