EXAM 1.docx - Skip To Content Dashboard Account Dashboard Courses Calendar 1 unread message1 Inbox Help Hurricane Info Resources Fall 2019 TAX4011 100

EXAM 1.docx - Skip To Content Dashboard Account Dashboard...

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Skip To Content Dashboard Account Dashboard Courses Calendar 1 unread message1 Inbox Help Hurricane Info Resources TAX4011 100 13412 Quizzes First Test Fall 2019
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Home Announcements Syllabus Modules Grades Honorlock Follett Discover Badges Cisco Webex First Test Due Sep 28 at 11:59pm Points 200 Questions 20 Available after Sep 22 at 12am Time Limit 180 Minutes Instructions
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Attempt History Attempt Time Score LATEST Attempt 1 94 minutes 80 out of 200 Score for this quiz: 80 out of 200 Submitted Oct 30 at 10:22pm This attempt took 94 minutes. Question 10 / 10 ptsAaron transferred property worth $78,000 and services worth $22,000 to the BJ Corporation. In exchange, he received stock in BJ valued at $100,000. Immediately after the exchange, Aaron owned 80% of the only class of outstanding stock. Which of the following is true with regard to Aaron’s treatment of this transaction? Correct AnswerOrdinary income of $22,000.Short-term capital gain of $100,000.Short-term capital gain of $25,000.You AnsweredNo income until the stock is sold.The general rule of Sec. 351 is that no gain or loss is recognized if one or more persons transfer property to a corporation solely for stock and if immediately after the exchange such person or persons are in control of the corporation (i.e., own at least 80% of the stock). Sec. 351(d) states, however,that stock issued for services is not issued in return for property. Stock issuedfor services falls outside the general rule, and income must be recognized onsuch a transfer. The fair market value of stock received for services ($22,000) must be included in Aaron’s income. All other stock received was in exchange for property, and no gain or loss is recognized on its transfer. Question 2
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10 / 10 ptsDonna exchanges property having an $18,000 adjusted basis and a $35,000 fair market value for 70 shares of the newly created Table Corporation stock. Evelyn exchanges legal services worth $15,000 for the remaining 30 shares of Table’s stock. Which of the following is true?
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