Accounting

posted by .

Rita forms Finch Corporation by transferring land (basis of 125,000; fair market value of 750,000) which is subject to a mortgage of 375,000. Two weeks prior to incorporating Finch, Rita borrows 125,000 for personal purposes and gives the lender a second mortgage on the land. Finch Corporation issues stock worth 250,000 to Rita and assumes the two mortgages on the land. What are the tax consequences to Rita and Finch Corporation?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. 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 …
  2. Corp Fed Tax

    Question Details: Gail and Mark from Sap Corp with the following considerations: Consideration Transferred Basis to Fair Market Number of Transferor Value Shares Issued From Mark Cash $50,000 50,000 installment obligation 140,000 250,000 …
  3. 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. …
  4. Accounts

    The following details relates to the two machines X and Y: Machine X Machine Y Cost Estimated Life Estimated salvage value Working Capital required in the beginning Rs. 56,125 Rs.56,125 5 years 5 years Rs. 3,000 Rs. 3,000 Rs.10,000 …
  5. fundamentals of taxation

    Determine the basis of stock in the hands of the shareholder in each of the following instances. Assume that the 80% rule is met in all cases. a. Contribution of property with a basis of $1,000 and a FMV of $1,400. b. Contribution …
  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

    You trade equipment in 2010 and pay a $10,000 cash boot for similar equipment with a fair market value of $20,000. The transaction cost is $100. You paid $25,000 for your old equipment. The depreciation deduction allowed for tax purposes …
  8. 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 …
  9. Accounting

    3) Green Corporation is a calendar-year taxpayer. All of the stock is owned by Evan. His basis for the stock is $35,000. On March 1 (of a nonleap year), Green Corporation distributes $120,000 to Evan. Determine the tax consequences …
  10. Tax Accounting

    Can someone explain how to do the math on this?

More Similar Questions