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AC553_W4_Solution14_56 - consequences to Sound& Fury...

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1 Problem 14-56 Solution Capital Contributions The municipality of Viewpoint, Kansas, wishes to attract local businesses. As part of a development program, it donated a building with a basis of $50,000 and a value of $200,000 plus $75,000 in cash to Sound & Fury Drums Inc. What are the tax
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Unformatted text preview: consequences to Sound & Fury? Solution: Sound & Fury has no gross income from capital contributions, whether from shareholders or not. Code Sec. 118. However, the building basis is zero and anything acquired with the cash also has a zero basis. Code Sec. 362(c)....
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