Determine the tax consequences to each shareholder and the corporation and show supporting computations. Your answers should
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Question:
Determine the tax consequences to each shareholder and the corporation and show supporting computations. Your answers should include:
- Gain/loss realized by each shareholder
- Gain/loss recognized by each shareholder (consider effect of Rev. Rul. 68-55)
- Character of any gain/loss recognized by each shareholder
- Shareholder's basis in the shares of stock received
- Shareholder's basis in the bonds received
- Corporation's basis in the assets received
- The tax treatment of any other income, loss, deductions, etc. recognized by the corporation or shareholder.
- In the current year, Xavier and Yolanda formed XY Corporation. Xavier contributed $500,000 cash and Yolanda contributing the following property:
Basis | FMV | |
Land | $20,000 | $175,000 |
Building | 60,000 | 525,000 |
Both shareholders received 100 shares of common stock and the corporation assumed a $200,000 purchase money mortgage secured by the land and building.
Related Book For
South Western Federal Taxation 2016 Corporations Partnerships Estates And Trusts
ISBN: 9781305399884
39th Edition
Authors: James Boyd, William Hoffman, Raabe, David Maloney, Young
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