Devin transfers to Haden Corporation $9,000 cash and machinery having a $13,000 basis and a $31,000...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Devin transfers to Haden Corporation $9,000 cash and machinery having a $13,000 basis and a $31,000 FMV in exchange for 65 shares of Haden stock. The machinery was used in Devin's business, originally cost Devin $44,000, and is subject to a $27,000 liability, which Haden assumes. Louis exchanges $13,000 cash for the remaining 65 shares of Haden stock. Requirement a. What are the amount and character of Devin's recognized gain or loss? Devin realizes a(n) $ and recognizes Requirement b. What is Devin's basis in the Haden stock? Devin's basis in the Haden stock is Requirement c. What is Haden's basis in the machinery? Haden's basis in the machinery is $ Requirement d. What are the amount and character of Louis's recognized gain or loss? Louis recognizes Requirement e. What is Louis's basis in the Haden stock? Louis's basis in the Haden stock is $ Requirement f. When do Devin and Louis's holding periods for their stock begin? Devin's holding period for her stock starts on Louis's holding period Requirement g. How would your answers to Parts a through f change if Louis received $13,000 of Haden stock for legal services (instead of cash)? a. Devin recognizes b. Devin's basis in the Haden stock is C. Haden's basis in the machinery is d. Louis realizes a(n) $ e. Louis's basis in the Haden stock is and recognizes f. When do Devin and Louis's holding periods for their stock begin? Louis's holding period for his stock would would Devin's stock Devin transfers to Haden Corporation $9,000 cash and machinery having a $13,000 basis and a $31,000 FMV in exchange for 65 shares of Haden stock. The machinery was used in Devin's business, originally cost Devin $44,000, and is subject to a $27,000 liability, which Haden assumes. Louis exchanges $13,000 cash for the remaining 65 shares of Haden stock. Requirement a. What are the amount and character of Devin's recognized gain or loss? Devin realizes a(n) $ and recognizes Requirement b. What is Devin's basis in the Haden stock? Devin's basis in the Haden stock is Requirement c. What is Haden's basis in the machinery? Haden's basis in the machinery is $ Requirement d. What are the amount and character of Louis's recognized gain or loss? Louis recognizes Requirement e. What is Louis's basis in the Haden stock? Louis's basis in the Haden stock is $ Requirement f. When do Devin and Louis's holding periods for their stock begin? Devin's holding period for her stock starts on Louis's holding period Requirement g. How would your answers to Parts a through f change if Louis received $13,000 of Haden stock for legal services (instead of cash)? a. Devin recognizes b. Devin's basis in the Haden stock is C. Haden's basis in the machinery is d. Louis realizes a(n) $ e. Louis's basis in the Haden stock is and recognizes f. When do Devin and Louis's holding periods for their stock begin? Louis's holding period for his stock would would Devin's stock
Expert Answer:
Answer rating: 100% (QA)
3000 of ordinary income Stock FMV Received 17000 Release from liability 28000 Amount realized 45000 ... View the full answer
Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
Posted Date:
Students also viewed these accounting questions
-
Barbara transfers to Moore Corporation $10,000 cash and machinery having a $15,000 basis and a $35,000 FMV in exchange for 50 shares of Moore stock. The machinery was used in Barbaras business,...
-
In the current yoar, Mick, Hank, and Lulu form Hades Corporation Mick contributes land (a capital asset) having a $125,000 FMV in exchange for 145 shares of Hades slock He purchased the land three...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
What must be the beta of a portfolio with E( rP ) = 18%, if rf = 6% and E (rM) = 14%?
-
The Social Dimension What kind of bailment existed in this case? Explain your answer. The Legal Environment Dimension Could Meridian have effectively limited its bailment liability? Explain.
-
Assume the same facts as in problem 60 , except that the partnership agrees to distribute property 2 and \(\$ 75,000\) cash to Clay in liquidation of his interest. (To fund the distribution, the...
-
Explain why expert systems are so called.
-
Identify the feasible region for the following set of constraints: 3A - 2B 0 2A - 1B 200 1A 150 A, B 0
-
Norse LLC , an accrual basis computer manufacturer, began offer a two - year warranty on their computers sold in 2 0 X 1 . Based upon 2 0 X 1 sales they have recorded a warranty liability of $ 7 5 ,...
-
You are now going to do a simple breakeven point for number of passengers on a flight for the years 20x4 to 20x6. Go to the worksheet that says Template for DB 3.2. Complete the breakeven analysis...
-
A high-purity carbon dioxide product stream at P1 = 370 kPa and T1 = 77 C from a gas absorption separation system is to be compressed to P2 = 13.3 MPa and T2 = 62 C for pipeline transport and...
-
Well, its my job that brought us here in the first place I am going to have to make a decision to stick with this assignment and hope I can work things out, or to return to the United States and...
-
This can be done in groups or individually. After the exercise, discuss your proposals with the rest of the class. You are the expatriate general manager of a British companys subsidiary in Brazil,...
-
Select a combination of public and private sector organizations and identify the extent to which their vision and mission statements: i. Are what Rumelt calls template-style strategy (see Rumelt...
-
Everyone can make mistakes, but sometimes these can have severe consequences. The employees of the insurance company Aviva Investors asset management division simultaneously received an email from...
-
A coworker takes credit for the excellent job youve performed. Frustrating! Its probably happened to you or someone you know. How did it happen? Perhaps you shared an idea with a coworker and then...
-
When paying expenses for a corporate meeting, meeting expenses are typically _______________ . Question 43 options: Paid by one company representative with one check or credit card Paid by attendees...
-
Compare and contrast debt financing and equity financing as ways of starting a new business. Does one have an overall advantage over the other? What situation is more favorable to the use of debt...
-
Why do some donors consider the qualified terminable interest property (QTIP) transfer an especially attractive arrangement for making gifts to their spouses?
-
Kate, Chad, and Stan are partners in the KCS Partnership, which operates a manufacturing business. The partners formed the partnership ten years ago with Kate and Chad each as general partners having...
-
Elaine is a physician who uses the cash method of accounting for tax purposes. During the current year, Elaine bills Ralph 51.200 for office visits and outpatient surgery. Unfortunately, unknown to...
-
How does the product life cycle influence marketing strategy decisions?
-
What are the stages in the product life cycle?
-
What is the difference between secondary demand and primary demand?
Study smarter with the SolutionInn App