Mirza_Assignment 5 - Ayesha Afzal Mirza Federal Income...

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Ayesha Afzal Mirza Federal Income Taxation FALB09 - Sec A Instructor: Joseph Poletti Assignment 5
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8. a. $0. b. $190,000. c. $140,000. d. $0. e. $285,000. f. $125,000 (basis in the equipment) and $10,000 (basis in the patent). g. The answers would not change. There is no requirement that the transferors receive the same type of stock. Further, both common stock and most preferred stock qualify as ‘‘stock.” However, if Gail received “nonqualified preferred stock,” her realized gain would be recognized because this type of preferred stock is treated as boot. h. The answers would not change. There is no requirement that the transferors be individuals. 13. a. Ann does not recognize a gain. Bob recognizes a gain of $15,000, the value of the services Bob rendered to the corporation. Bob does not recognize gain on the transfer of property to the corporation. b. Ann has a basis of $150,000 in the stock in Robin Corporation. Bob has a basis of $45,000 = $30,000 + $15,000 in his stock in Robin Corporation. c. Robin Corporation has a basis of $150,000 in the property Ann transferred and a basis of $30,000 in property Bob transferred. Robin Corporation capitalizes $15,000 as organization costs 28. Following the procedure used in Example 38 in the text, proceed as follows: Green Orange Yellow Corporation Corporation Corporation Step 1 70% × $100,000 (dividend received) $ 70,000 70% × $200,000 (dividend received) $140,000 70% × $200,000 (dividend received) $140,000 Step 2 70% × $200,000 (taxable income) $140,000
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This note was uploaded on 02/23/2010 for the course ACCT 234849 taught by Professor Don during the Spring '10 term at University of Houston.

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Mirza_Assignment 5 - Ayesha Afzal Mirza Federal Income...

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