Post a New Question

Tax

posted by .

Fay, a sole proprietor is engaged in a cash basis, service business. In the current year, she incorporates the business to form Robin Corporation. She transfers assets with a basis of $400,000 (fair market value of $1.2 million), a bank loan of $360,000 (which Robin assumes) and $80,000 in trade payables in return for all of Robin's stock. What are the tax consequences of the incorporation of the business?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Tax consequence

    Corporation is a calendar-year taxpayer. All of the stock is owned by Fred. His basis for the stock is $35,000. On 3/1 (non-leap year), Corporation distributes $120,000 to Evan. Determine the tax consequences of the cash distribution …
  2. accrual basis accounting vs. cash accounting basis

    Can someone please check my answers to the following problem. Jack Eagles, a CPA, keeps his accounting records for his practice on the cash basis. During the current year, his clients paid $750,000 in the accounting and tax fees of …
  3. Federal Tax II

    Perry organized Cardinal Corporation 10 years ago by contributing property worth $2 million, basis of $450,000 for 2,500 shares of stock in Cardinal, representing 100% of the stock in the corporation. Perry later gave each of his children, …
  4. accounting

    ann, irene, and bob incorporate their respective businesses and form Dove Corporation. Ann exchanges her property (basis of $100,000 and fair market value of $400,000) for 200 shares in Dove corporation on March 1, 2005. Irene exhanges …
  5. Fed Tax

    Locust Corp desires to set up a distribution facility in a southern state. After consideration negotiations with a small town in Alabama, Locust accepts the following offer: land (fair market value of $3 million) and cash of $1 million. …
  6. Math

    On March 31, 2009, Wolfson Corporation acquired all of the outstanding common stock of barney Corporation for $17,000,000 in cash. The book values and fair values of barney's assets and liabilities were as follows: Book value Fair …
  7. Accounting

    Kathryn, an individual, own all of the outstanding stock in Copper Corporation. Kathryn purchased her stock in Copper 11 years ago, and her basis is $18,000. At the beginning of this year, the corporation has $38,000 of accumulated …
  8. accounting

    Jane and Walt form Orange Corporation. Jane transfers equipment worth $475,000 (basis of $100,000) and cash of $25,000 to Orange Corporation for 50% of its stock. Walt transfers a building and land worth $525,000 (basis of $200,000) …
  9. Accounting, TAX

    Which of the following entities may not use the cash method of accounting?
  10. Tax Accounting

    Can someone explain how to do the math on this?

More Similar Questions

Post a New Question