T11F-Chp-13-4-Class-Invest-in-business-entities

T11F-Chp-13-4-Class-Invest-in-business-entities - Problem...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Problem 11635dbbae9b5de8a6f135b6c6bba238cec56722.xls Page 1 of 2 Part 1. Investing in Business - No Debt Ann and Beth organize a new corporation. Ann invests cash of $100,000 for a 20% ownership interest. Beth invests a building with a FMV of $400,000 (basis of $250,000) in exchange for an 80% interest. Ann invests cash FMV $100,000 20% Beth invests building (Basis- $250,000) FMV $400,000 80% Total Assets $500,000 Owner Equity Ann $100,000 20% Beth $400,000 80% Type of Entity Corporation Partnership Beth's Realized Gain 1001 Not Applicable 1.1001-2 Beth's Recognized Gain 351 721 Beth's basis in entity 358 722 Entity's basis in building 362 723 Part 2. Investing in Business - Debt on Property Ann and Beth organize a new corporation. Ann invests cash of $100,000 for a 20% ownership interest. Beth invests a building with a FMV of $600,000 (basis of $250,000) in exchange for 80% interest. A mortgage of $200,000 on the building invested by Beth was assumed by the new corporation Ann invests cash FMV $100,000 17% Beth invests building (Basis - $250,00FMV $600,000 86% Total Assets $700,000 Mortgage Payable Debt $200,000 Owner Equity Ann $100,000 20% Beth $400,000 80% Type of Entity Corporation Partnership Beth's Realized Gain 1001 Not Applicable 1.1001-2 Beth's Recognized Gain
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 2

T11F-Chp-13-4-Class-Invest-in-business-entities - Problem...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online