Business, 17.03.2020 03:21 grey00

Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation’s stock. Hermione contributed a building and land with the following fair market values and adjusted bases in return for 50 percent of the corporation’s stock:

FMV Tax adjusted Basis
Building $75,000 $20,000
Land 175,000 80,000
Total $250,000 $100,000

To equalize the exchange, Wizard Corporation paid Hermione $50,000 in addition to her stock.
a. What amount of gain or loss does Ron realize on the formation of the corporation? What amount, if any, does he
recognize?
b. What is Ron's tax basis in the stock he receives in return for his contribution of property to the corporation?
c. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize?
d. What is Hermione's tax basis in the stock she receives in return for her contribution of property to the corporation?
e. What tax-adjusted basis does Wizard Corporation take in the land and building received from Hermione?
Assume Hermione's tax-adjusted basis in the land was $200,000.
f. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize?
g. What tax-adjusted basis does Wizard Corporation take in the land and building received from Hermione? Assume Hermione's tax-adjusted basis in the land was $250,000.
h. What amount of gain or loss does Hermione realize on the formation of the corporation? What amount, if any, does she recognize?
i. What tax-adjusted basis does Wizard Corporation take in the land and building received from Hermione?
j. What election can Hermione and Wizard Corporation make to allow Wizard Corporation to take a carryover basis in the land?

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 22:00

If a bond is issued at a premium the effective interest rate is most likely

Answers: 2

Answer

Business, 22.06.2019 01:00

Who is better at multi-tasking? in business, employees are often asked to perform a complex task when their atten-tion is divided (i.e., multi-tasking). human factors (may 2014) published a study designed to determine whether video game players are better than nonâ€“video game play-ers at multi-tasking. each in a sample of 60 college stu-dents was classified as a video game player or a non-player. participants entered a street crossing simulator and were asked to cross a busy street at an unsigned intersec-tion. the simulator was designed to have cars traveling at various high rates of speed in both directions. during the crossing, the students also performed a memory task as a distraction. two variables were measured for each student: (1) a street crossing performance score (measured out of 100 points) and (2) a memory task score (measured out of 20 points). the researchers found no differences in either the street crossing performance or memory task score of video game players and non-gamers. â€śthese results,â€ť say the researchers, â€śsuggest that action video game players [and non-gamers] are equally susceptible to the costs of dividing attention in a complex taskâ€ť

Answers: 1

Answer

Business, 22.06.2019 09:40

Microsoft's stock price peaked at 6118% of its ipo price more than 13 years after the ipo suppose that $10,000 invested in microsoft at its ipo price had been worth $600,000 (6000% of the ipo price) after exactly 13 years. what interest rate, compounded annually, does this represent? (round your answer to two decimal places.)

Answers: 1

Answer

Business, 22.06.2019 11:00

When using various forms of promotion to carry the promotion message, it is important that the recipients of the message interpret it in the same way. creating a unified promotional message, where potential customers perceive the same message, whether it is in a tv commercial, or on a billboard, or in a blog, is called

Answers: 2

Answer

You know the right answer?

Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return...

Questions