Scenario 2. Joe asks his friend Robin to join him in starting the Be You Sailing...
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Scenario 2. Joe asks his friend Robin to join him in starting the Be You Sailing Corporation, which issued voting common stock with a fair market value of $1,400,000. They each transferred property in exchange for stock as follows. Property Joe Robin Boat Land and Boat Dock Adjusted Basis Fair Market Value % of Stock Acquired $250,000 $500,000* $500,000 33% $900,000 67% a. yes, received boot The land was subject to a $100,000 mortgage that was assumed by the corporation. b. no, less than 80% control 5. Would the above transfer qualify the for non-recognition of gain or loss under Code Sec. 351? c. yes, 80% control and only stock was exchanged d. no, boot was received e. no a. Shareholders _6. What party is the Code Sec. 351 referring to? Who is trying to qualify for non-recognition of the gain? b. Corporation What would Robin (shareholder)'s basis be after the formation transaction? a. $500,000 b. $400,000 c. $900,000 d. $250,000 _Is Robin's basis in the property, stock, or both? a. Property b. Stock c. Both Scenario 2. Joe asks his friend Robin to join him in starting the Be You Sailing Corporation, which issued voting common stock with a fair market value of $1,400,000. They each transferred property in exchange for stock as follows. Property Joe Robin Boat Land and Boat Dock Adjusted Basis Fair Market Value % of Stock Acquired $250,000 $500,000* $500,000 33% $900,000 67% a. yes, received boot The land was subject to a $100,000 mortgage that was assumed by the corporation. b. no, less than 80% control 5. Would the above transfer qualify the for non-recognition of gain or loss under Code Sec. 351? c. yes, 80% control and only stock was exchanged d. no, boot was received e. no a. Shareholders _6. What party is the Code Sec. 351 referring to? Who is trying to qualify for non-recognition of the gain? b. Corporation What would Robin (shareholder)'s basis be after the formation transaction? a. $500,000 b. $400,000 c. $900,000 d. $250,000 _Is Robin's basis in the property, stock, or both? a. Property b. Stock c. Both
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Analysis of Be You Sailing Corporation Scenario 5 Would the above transfer qualify for nonrecognition of gain or loss under Code Sec 351 c yes 80 cont... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
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