Henrietta is the president and sole shareholder of Clutter Corporation. In 2015, Henrietta transferred ownership of her
Question:
Henrietta is the president and sole shareholder of Clutter Corporation. In 2015, Henrietta transferred ownership of her personal residence to the corporation. As part of the transfer, Clutter Corporation assumed Henrietta's mortgage on the house. At the same time, she and the corporation entered into an agreement that lets Henrietta lease the property for as long as she wants at an amount approximating the monthly mortgage payments on the house. During the current year, Clutter paints the house at a cost of $5,000, makes other repairs totaling $3,000, and adds an entertainment room at a cost of $30,000. Current-year property taxes and interest paid by Clutter on the house are $1,400 and $18,000, respectively. Henrietta paid $18,000 in rent to Clutter.
Step by Step Answer:
Concepts In Federal Taxation
ISBN: 9781337702621
26th Edition
Authors: Kevin E. Murphy, Mark Higgins