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Chapter 15 Prob 83 Homework week 5

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Question;Chapter 15: Problem 83;Required questions to answer;a. Identify significant;tax and non tax issues or concerns that may differ across;entity types.;b. Provide your;recommendation for forming CCS as a C corporation, S corporation;LLC, or partnership.;Explain your reasoning for your choice of entity, identify any issues that you;may still be concerned about, and suggest recommendations for dealing with the;concerns.;39.(LO2)Zhang;incorporated her sole proprietorship by transferring inventory, a;building, and land to;the corporation in return for 100 percent of the corporation?s;stock. The property;transferred to the corporation had the following fair;market values and;tax-adjusted bases;FMV Tax-Adjusted Basis;Inventory $ 20,000 $ 10,000;Building 150,000 100,000;Land 230,000 300,000;Total $400,000 $410,000;The corporation also;assumed a mortgage of $100,000 attached to the building;and land. The fair;market value of the corporation?s stock received in the exchange;was $300,000. The;transaction met the requirements to be tax-deferred under ?351.;a. What amount of gain;or loss does Zhangrealizeon the transfer of the;property to her corporation?;b. What amount of gain;or loss does Zhangrecognizeon the transfer of the;property to her;corporation?;c. What is Zhang?s tax;basis in the stock she receives in the exchange?;d. What is the corporation?s;tax-adjusted basis in each of the assets received in the exchange? Assume the;corporation assumed a mortgage of $500,000 attached to the building and land.;e. How much, if any, gain;or loss does Zhang recognize on the exchange assuming the revised facts?;f. What is Zhang?s tax;basis in the stock she receives in the exchange?;g. What is the;corporation?s tax-adjusted basis in each of the assets received in the;exchange?

 

Paper#38700 | Written in 18-Jul-2015

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