C12-Chp-07-1D-Ruth-Pat--Dan-DCorp-2012-extra

C12-Chp-07-1D-Ruth-Pat--Dan-DCorp-2012-extra - Summary...

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Summary slides for Ruth and Pat. Also, for Dan, DCorp, and Big Corp. Etc. 1
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Old Corporation - owned equally by Old Corp. ( Construction and Repairs ) has been profitable, all earnings reinvested to grow the business. Ruth wants to expand the CONSTRUCTION business. Pat opposes this approach. Pat prefers to concentrate on REPAIR business. 2
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Old Corporation - owned equally by They have agreed to a division of assets- Pat will receive the Repair business assets and surrender his shares in OLD Corporation. Pat's basis for his Old shares is $50,000. Ruth and Pat are not related. 3
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4 OLD Corporation Basis FMV Home REPAIR business $200,000 $600,000 Home CONSTRUCTION 200,000 600,000 Total assets $400,000 $1,200,000 Common Stock $100,000 (Ruth 50%, Pat 50%) $300,000 Total Owner Equity $400,000 $1,200,000
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FMV Construct $600,000 Asset REPAIR $600,000 Stock Com. Stock Ret. Earn. 50% Basis
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C12-Chp-07-1D-Ruth-Pat--Dan-DCorp-2012-extra - Summary...

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