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In 2010, Ed, Fran, and George form Jet Corporation. Ed contributes land having a $35,000 FMV purchased as

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In 2010, Ed, Fran, and;George form Jet Corporation. Ed contributes land having a $35,000 FMV purchased as;an investment in 2006 for $15,000 in exchange for 35 shares of Jet stock. Fran contributes;machinery (Sec. 1231 property) purchased in 2006 and used in her business in;exchange for 35 shares of Jet stock. Immediately before the exchange, the machinery had;a $45,000 adjusted basis and a $35,000 FMV. George contributes services worth $30,000;in exchange for 30 shares of Jet stock.;a. What is the amount of Ed?s recognized gain or loss?;b. What is Ed?s basis in his Jet shares? When does his holding period begin?;c. What is the amount of Fran?s recognized gain or loss?;d. What is Fran?s basis in her Jet shares? When does her holding period begin?;e. How much income, if any, does George recognize?;f. What is George?s basis in his Jet shares? When does his holding period begin?;g. What is Jet?s basis in the land and the machinery? When does its holding period begin?;How does Jet treat the amount paid to George for his services?;h. How would your answers to Parts a through g change if George instead contributed;$5,000 in cash and services worth $25,000 for his 30 shares of Jet stock?

 

Paper#32200 | Written in 18-Jul-2015

Price : $27
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