Wade and Paul form Swan Corporation with the following investments. Wade transfers machinery (basis of $40,000 and fair market value of $100,000) and Paul transfers land (basis of $20,000 and fair market value of $90,000) and services rendered (worth $10,000) in organizing the corporation. Each is issued 25 shares in Swan Corporation. With respect to the transfers:
A. Wade has no recognized gain; Paul recognizes income/gain of $80,000.
B. Neither Wade nor Paul has recognized gain or income on the transfers.
C. Swan Corporation has a basis of $30,000 in the land transferred by Paul.
D. Paul has a basis of $30,000 in the 25 shares he acquires in Swan Corporation.
E. None of these.
Answer: D
You might also like to view...
Individuals who are truly happy and peaking in their lives are those who are:
a. performing a job they don’t like b. performing a job and accomplishing goals that reflect the purpose in their lives c. accomplishing goals, but not in a job they are happy in d. performing a job they like, but not accomplishing goals that reflect the purpose in their lives
Scheduling refers to the travel pattern the salesperson uses in working his or her territory.
Answer the following statement true (T) or false (F)
One attribute of the U.S. tariff schedule is
A. that its categories are quite general and easy to apply. B. how specific it is. C. that its harmonized version can be accessed via cell phone and iPad. D. that it is printed in both Arabic and Hebrew.
Individuals normally incur a tax penalty if funds are drawn from a traditional IRA before the age of 59 1/2
Indicate whether the statement is true or false.