CHAPTER4 tax problem-4302 - CHAPTER 4 SUPPLEMENTAL HANDOUT...

CHAPTER 4
SUPPLEMENTAL HANDOUT C CORPORATION TAXATION PROBLEMS
1. Wen, Minthu, Lorena and Norma form Vasquez Corporation with the following investments:
Consideration Transferred
Basis To Fair Market Number Of
Transferor Value Shares Issued
From Wen—
Personal Services $ -0- $ 30,000
Rendered To Vasquez
Corporation
From Minthu—
Equipment 345,000 300,000
From Lorena—
Unrealized Accounts
Receivable -0- 150,000 130 *
From Norma—
Land And Building 210,000 450,000
Mortgage On Land And 300,000 300,000
Building
* - Lorena receives $20,000 in Cash in addition to the 130 shares of stock.
The Mortgage transferred by Norma is assumed by Vasquez Corporation. The fair market value of
each share of stock of Vasquez Corporation is $1,000.
(a) Determine the Recognized Gain Or Loss, if any, for Wen.
(b) Determine Wen's basis in her shares of stock in Vasquez Corporation.
(c) Determine the Recognized Gain Or Loss, if any, for Minthu.
(d) Determine Minthu's basis in her shares of stock in Vasquez Corporation.
(e) Determine the basis to Vasquez Corporation in the Equipment transferred by Minthu.
(f) Determine the Recognized Gain Or Loss, if any, for Lorena.
30
300
150