Frank, Sara, and Gilbert form FSG Services, Inc., an S corporation, by contributing the following properties:...

 

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Frank, Sara, and Gilbert form FSG Services, Inc., an S corporation, by contributing the following properties: Shareholder Frank Sara Property Cash Cash Equipment Gilbert Land and Building Liability on building contributed by Gilbert assumed by corporation Basis Value 150,000 150,000 80,000 80,000 40,000 70,000 220,000 300,000 100,000 The three shareholders above own 30%, 30%, and 40% of the corporation respectively. Sara also loans the corporation $50,000 and the debt is evidenced by an executed corporate note. During the year, the corporation earns ordinary operating income before officer salaries of $400,000. Frank, Sara, and Gilbert earn officer salaries of $20,000, $100,000, and $140,000 respectively. In addition to these payments, each shareholder also takes a $20,000 cash distribution during the year. 6) What is Frank's basis for his stock at formation? 7) What is Sara's basis in stock at formation? 8) What is Gilbert's basis in stock at formation? 9) What is Sara's basis for absorbing pass-through losses at formation? 10) What is Gilbert's stock basis after the first year? Frank, Sara, and Gilbert form FSG Services, Inc., an S corporation, by contributing the following properties: Shareholder Frank Sara Property Cash Cash Equipment Gilbert Land and Building Liability on building contributed by Gilbert assumed by corporation Basis Value 150,000 150,000 80,000 80,000 40,000 70,000 220,000 300,000 100,000 The three shareholders above own 30%, 30%, and 40% of the corporation respectively. Sara also loans the corporation $50,000 and the debt is evidenced by an executed corporate note. During the year, the corporation earns ordinary operating income before officer salaries of $400,000. Frank, Sara, and Gilbert earn officer salaries of $20,000, $100,000, and $140,000 respectively. In addition to these payments, each shareholder also takes a $20,000 cash distribution during the year. 6) What is Frank's basis for his stock at formation? 7) What is Sara's basis in stock at formation? 8) What is Gilbert's basis in stock at formation? 9) What is Sara's basis for absorbing pass-through losses at formation? 10) What is Gilbert's stock basis after the first year?

Answer rating: 100% (QA)

Franks basis for his stock at formation is 150000 Saras basis in stock at formation is 80000 Gilbert... View the full answer