FTax IRGTB ch19 p001-018

In exchange for 50 shares of stock g contributed land

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Unformatted text preview: mortgage of $20,000, which the corporation assumed. What amount of gross income must F recognize due to the incorporation transaction? a. b. c. d. e. $0 $10,000 $25,000 $35,000 None of the above 43. F and G formed a corporation on March 1 this year. F transferred equipment worth $40,000 (basis $15,000) in exchange for 40 shares of stock and performed services worth $10,000 in exchange for 10 shares of stock. In exchange for 50 shares of stock, G contributed land worth $70,000 (basis $9,000) subject to a mortgage of $20,000, which the corporation assumed. What is F's total basis in the stock that he received? a. b. c. d. e. $15,000 $40,000 $25,000 $50,000 None of the above 44. F and G formed a corporation on March 1 this year. F transferred equipment worth $40,000 (basis $15,000) in exchange for 40 shares of stock and performed services worth $10,000 in exchange for 10 shares of stock. In exchange for 50 shares of stock, G contributed land worth $70,000 (basis $9,000) subject to a mortgage of $20,000, which the corporation assumed. What amount of gross income must G recognize due to the incorporation transaction? a. b. c. d. e. $0 $20,000 $11,000 $61,000 None of the above 45. F and G formed a corporation on March 1 this year. F transferred equipment worth $40,000 (basis $15,000) in exchange for 40 shares of stock and performed services worth $10,000 in exchange for 10 shares of stock. In exchange for 50 shares of stock, G contributed land worth $70,000 (basis $9,000) subject to a mortgage of $20,000, which the corporation assumed. Due to the exchange, the corporation will report a. b. c. d. Neither income nor deduction Some amount of income but no amount of deduction No income but some amount of deduction Some amount of income and some amount of deduction 46. F and G formed a corporation on March 1 this year. F transferred equipment worth $40,000 (basis $15,000) in exchange for 40 shares of stock and performed services worth $10,000 in exchange for 10 shares of stock. In exchange for 50 shares of stock, G contributed land worth $70,000 (basis $9,000) subject to a mortgage of $20,000, which the corporation assumed. Assume G recognized $27,500 of gain on the exchange. The corporation's basis for the land received is a. b. c. d. e. $9,000 $70,000 $36,500 $50,000 None of the above Test Bank 19-9 47. Which one of the following items may not be received in a tax-free incorporation? a. b. c. d. e. Demand notes Bonds with a maturity of 15 years Nonvoting cumulative participating preferred stock 30-year bonds convertible into common stock More than one item but less than all of the items 48. S transfers land to a new corporation for stock. The corporation plans to issue 1,000 shares of voting common and 500 shares of nonvoting preferred stock. To establish "control" under 351, the minimum number of preferred shares that S must receive is a. b. c. d. e. 0 251 500 400 not able to be determined from the facts given 49. Which one of the following is...
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This note was uploaded on 02/05/2012 for the course ACCT 112 taught by Professor Smith during the Spring '11 term at Adrian College.

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