Assume we have a client (Tom). Tom owns one-third of X Co. and has a tax basis

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Assume we have a client (Tom). Tom owns one-third of X Co. and has a tax basis in his ownership interest of $30 (not including any debt). Tom has held his interest in X Co. for longer than one year. Tom desires to sell his interest for its fair market value of $220 to Jennifer, an unrelated buyer. X Co. has the following balance sheet: Adjusted basis FMV Cash $ 90 $ 90 Accounts Receivable 0 90 Inventory 120 150 Capital Assets 60 150 Equipment (1245 Property)** 90 450 $ 360 $ 930 Liabilities 270 270 Capital Accounts: Tom 30 220 Partner B 30 220 Partner C 30 220 $ 360 $ 930 **The equipment's original cost was $360. Scenario 1: What is Tom's gain if X Co. is a C corporation? Scenario 2: What is Tom's gain if X Co. is an S corporation? Scenario 3: What is Tom's gain if X Co. is an LLC

Posted Date: May 18, 2024 10:03 PM

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Assume we have a client (Tom). Tom owns one-third of X Co. and has a tax basis

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