A shareholder contributes land and a building with fair market values of 308 and $837 respectively in return for common stock and $ 11 in cash. How much boot, if any, is allocated to the land?
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- An S-Corporation has ownership of a piece of land with an adjusted basis of $10,000 and a FMV of $100,000. It distributes this land to a shareholder, what basis would the shareholder have in this land? a. $0 b. It would depend on the shareholder's inside basis c. $90,000 d. $100,000 e. $10,000(Based on Appendix B) LTV Corporation grants SARs to key executives. Upon exercise, the SARs entitleexecutives to receive either cash or stock equal in value to the excess of the market price at exercise over theshare price at the date of grant. How should LTV account for the awards?The Vary Company has total assets with a book value of $3,000,000 and a fair value of $4,000,000. A potential primary beneficiary company has guaranteed the debt of the Vary Company and will receive a share of income of the Vary Company based on contractual terms. The primary beneficiary will also have decision power. a. Will the primary beneficiary company record an investment in the equity of the Vary Company? b. Will the Vary Company need to be consolidated. If it is to be consolidated, what adjustments would be needed in the consolidation process?
- Indigo Corporation wants to transfer cash of $150,000 or property worth $150,000 to one of its shareholders, Linda, in a redemption transaction that will be treated as a qualifying stock redemption. If Indigo distributes property, the corporation will choose between two assets that are each worth $150,000 and are no longer needed in its business: Property A (basis of $75,000) and Property B (basis of $195,000). a. Compute Indigo’s recognized gain or loss if it distributes Property A in redemption of Linda’s shares. b. Compute Indigo’s recognized gain or loss if it distributes Property B in redemption of Linda’s shares. c. Compute Indigo’s recognized gain or loss if it sells Property B to an unrelated party and then distributes the sale proceeds in redemption of Linda’s shares.3) Esme transfers land with a FMV of $900,000 to a newly formed corporation in exchange for all the stock. The land has a basis of $400,000 and debt of $600,000. The basis of the land for Esme is:An individual contributes property with an FMV in excess of basis to a corporatioin exchance for stock. The property is subject to a mortgage. In each of the followiinciances determine the basis obnestock in the hands of the shareholder and the bacof the propertycontributed in the hands of the corporation. Assume that the 80 ait.I meta. The property is subjoct to a morteage that is less than basis, and the corporatioassumes the morezec.o. The property is subicct to a morteage that is more than basis. and the corporatio:assumes the mortgage.
- LTV Corporation grants SARs to key executives. Upon exercise, the SARs entitle executives to receive either cash or stock equal in value to the excess of the market price at exercise over the share price at the date of grant. How should LTV account for the awards?-If the donor is a shareholder, a revenue or gain is recognized at an amount equal to the value of the donated asset. - If the donor is a shareholder, the donation is recorded by crediting an appropriately titled additional paid in capital account. - PPE received as donation is recorded at its fair value less cost to sell at the time of donation. True or FalseAssume there is no mortgage on the land, market value is $200 and the basis of the land is $60. The corporation borrows $5 from a bank and gives the $5 to W along with 100% of the stock in exchange for the land. A.) What is the fair market value of the stock? (Think of the balance sheet, what are the assets and the liabilities?) B.) What is the amount realized? What are the components of the amount realized? C) What is the gain realized? D.) What is the gain recognized?
- Mark received 10 ISOs (each option gives him the right to purchase 16 shares of Hendricks Corporation stock for $9 per share) at the time he started working for Hendricks Corporation five years ago, when Hendricks's stock price was $5 per share. Now that Hendricks's share price is $35 per share, Mark intends to exercise all of his options and hold all of his shares for more than one year. Assume that more than a year after exercise, Mark sells the stock for $35 a share. Note: Enter all amounts as positive values. Leave no answers blank. Enter zero if applicable. a. What are Mark's taxes due on the grant date, the exercise date, and the date he sells the shares, assuming his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent? Grant date Exercise date Sale date Taxes DueAbel Corp., an S corp., distributes property to a shareholder named Jay. Immediately before the distribution, the basis of Jay's investment in Abel Corp. totaled $31,000. Additional information follows: Adjusted basis of the property at the distribution date: $20,000 FMV of the property at the distribution date: $19,000 a. What is Jay's basis in his stock investment after the distribution? b. What is Jay's basis in the property after the distribution? c. What amount of loss would Abel Corp. recognize as a result of the distribution?X, resident citizen, had the following information for the year 2022:Gain from sale of office equipment, P20,000Gain from sale of land not used in business (selling price of P300,000), P100,000Gain from sale of shares of stock directly to the buyer, P50,000Gain from sale of shares of stock through the stock exchange (selling price, P200,000), P10,000Bad debt recovery, P50,000How much is the total capital gains tax?