CHAPTER 20--CORPORATIONS AN

Peter and audrey form junco corporation with the

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93. Peter and Audrey form Junco Corporation with the following investments: From Peter From Audrey Cash $800,000 Building (basis of $400,000, fair market value of $300,000) $300,000 Land (basis of $200,000; fair market value of $500,000) 500,000 Junco issues stock equally to Peter and Audrey. One of the tax consequences of these transfers is: A. Junco has a basis in the building of $300,000. B. Audrey has a recognized loss on the building of $100,000. C. Audrey has a basis in the Junco stock of $600,000. D. Audrey has a recognized gain on land of $300,000 but no recognized loss on the building. E. None of the above. 10
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94. Camilla and Dean form Grouse Corporation with the following investment: From Camilla From Dean Cash $300,000 Property (basis of $320,000; fair market value of $330,000) $330,000 Camilla and Dean each receive 300 shares of stock in Grouse Corporation and, in addition, Dean receives $30,000 in cash. As a result of the transfer, Dean’s basis in the stock and Grouse’s basis in the property will be: 95. Jordan and Addison form Dove Corporation with the following investments: From Jordan From Addison Cash $200,000 Equipment (basis of $400,000; fair market value of $300,000) 300,000 Land (basis of $300,000; fair market value of $600,000) $600,000 Jordan and Addison each receive one-half of the Dove stock. In addition, Addison receives cash of $100,000. One of the results of these transfers is: 96. As of January 1, 2010, Donald, the sole shareholder of Sandpiper (a calendar year C corporation), had a basis in his stock of $50,000. During 2010, Sandpiper had an operating loss of $100,000 and distributed a $70,000 dividend to Donald. As of January 1, 2010, Sandpiper had accumulated E & P of $200,000. What is Donald’s basis in his Sandpiper stock as of January 1, 2011? 97. As of January 1, 2010, Amanda, the sole shareholder of Tern (a calendar year S corporation), had a basis in her stock of $50,000. During 2010, Tern had a net operating loss of $100,000 and distributed a $70,000 dividend to Amanda. As of January 1, 2010, Tern had accumulated E & P of $200,000. What is Amanda’s basis in her Tern stock as of January 1, 2011? A. ($120,000). B. ($20,000). C. $0. D. $50,000. E. None of the above. 11
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98. As of January 1, 2010, Owl Corporation (a calendar year C corporation) has a deficit in accumulated earnings and profits (E & P) of $150,000. In 2010, it has current E & P of $200,000 and distributes a $220,000 dividend to its shareholders. A result of these transactions is:
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  • Spring '12
  • honig
  • Corporation, Income tax in the United States, C CORPORATION

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