Log in
Accounting
1
answer
0
watching
98
views

Scenario: Costner's legal adviser, Mary,convinces him to form a small corporation with her that makesreplacement parts for the centrifuge equipment. Mary and Costnerform a company called Clean Ocean Parts Corporation. They bothtransfer property to this new company.

a. Calculate what gain, if any, Costner and Mary will recognizeon the transfer of property for stock in Clean Ocean PartsCorporation.

Costner transfers property worth $420,000 (basis of $150,000)for 70 shares of stock in Clean Ocean Parts Corporation. Mary'sservices are worth $15,000. She receives 30 shares for propertyworth $165,000 (basis of $30,000) and for legal services inorganizing the corporation.

Watch
1
answer
0
watching
98
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Sixta Kovacek
Sixta KovacekLv2
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related questions

Problem 18-31 (Algorithmic) (LO. 1, 3 )

Ann and Bob form Robin Corporation. Ann transfers property worth $315,000 (basis of $110,250) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $126,000 (basis of $25,200) and for legal services (worth $12,600) in organizing the corporation.

If there is no gain or loss, enter "0" for the amount.

a. What gain or income, if any, will the parties recognize on the transfer?

Ann recognizes of $______________. Bob recognizes of $______________.

b. What basis do Ann and Bob have in the Robin Corporation stock?

Ann has a basis of $_________, while Bob has a basis of $ in the stock.

c. What is Robin Corporation's basis in the property and services it received from Ann and Bob?

Robin Corporation has a basis of $____________ in the property Ann transferred and a basis of $____________ in the property Bob transferred.

Weekly leaderboard

Home
Homework Help 3,900,000
Accounting 580,000
Start filling in the gaps now
Log in