1 Anna transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for all of Robins stock, worth $300,000, and a 10 year note The note was executed by Robin Corp and made payable to Anna in the amount of $200,000 Because of the transfer a Kevin does not recognize gain b Kevin recognizes gain of $400,000 c Robin Corporation has a basis of $100,000 in the land d Robin Corporation has a basis of $300,000 in the land 2 Nathan forms Collins 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 Collins, Nathan borrows $125,000 for personal purposes and gives the lender a second mortgage on the land Collins Corporation issues stock worth $250,000 to Nathan and assumes the two mortgages on the land What are the tax consequences to Nathan and to Collins Corporation 3 Gold Corporation (a calendar year taxpayer) has taxable income of $300,000, and its financial records reflect the following for the year Federal income taxes paid $110,000 Net operating loss carryforward from previous year deducted currently 70,000 Gain recognized this year on an installment sale from a prior year 44,000 Depreciation deducted on tax return (ADS depreciation would have been $10,000) 40,000 Interest income on Iowa state bonds 8,000 Gold Corporations current E P is a $254,000 b $214,000 c $194,000 d $104,000 Please show all calculations 4 Jenna and Jason, equal shareholders in Diamond Corporation, receive $600,000 each in distributions on December 31 of the current year Diamond's current year taxable income is $1 million and it has no accumulated E P Last year, Diamond sold an appreciated asset for $1,200,000 (basis of $400,000) Payment for one half of the sale of the asset was made this year How much of Jennas distribution will be taxed as a dividend a $0 b $300,000 c $500,000 d $600,000 Please show all calculations 5 The tax treatment of corporate distributions at the shareholder level does not depend on a The character of the property being distributed b The earnings and profits of the corporation c The basis of stock in the hands of the shareholder d Whether the distributed property is received by an individual or a corporation

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1. Anna transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for all of Robins stock, worth $300,000, and a

1. Anna transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Robin Corporation, for all of Robins stock, worth $300,000, and a 10-year note. The note was executed by Robin Corp. and made payable to Anna in the amount of $200,000. Because of the transfer:

	a.	Kevin does not recognize gain.
	b.	Kevin recognizes gain of $400,000.
	c.	Robin Corporation has a basis of $100,000 in the land.
	d.	Robin Corporation has a basis of $300,000 in the land.

2. Nathan forms Collins 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 Collins, Nathan borrows $125,000 for personal purposes and gives the lender a second mortgage on the land. Collins Corporation issues stock worth $250,000 to Nathan and assumes the two mortgages on the land. What are the tax consequences to Nathan and to Collins Corporation?

3. Gold Corporation (a calendar year taxpayer) has taxable income of $300,000, and its financial records reflect the following for the year.

Federal income taxes paid	$110,000
Net operating loss carryforward from previous year deducted currently	70,000
Gain recognized this year on an installment sale from a prior year	44,000
Depreciation deducted on tax return (ADS depreciation would have been $10,000)	40,000
Interest income on Iowa state bonds	8,000

Gold Corporations current E & P is:

	a.	$254,000.
	b.	$214,000.
	c.	$194,000.
	d.	$104,000. Please show all calculations.

4.Jenna and Jason, equal shareholders in Diamond Corporation, receive $600,000 each in distributions on December 31 of the current year. Diamond's current year taxable income is $1 million and it has no accumulated E & P. Last year, Diamond sold an appreciated asset for $1,200,000 (basis of $400,000). Payment for one-half of the sale of the asset was made this year. How much of Jennas distribution will be taxed as a dividend?

	a.	$0
	b.	$300,000
	c.	$500,000
	d.	$600,000 Please show all calculations.

5. The tax treatment of corporate distributions at the shareholder level does not depend on:

	a.	The character of the property being distributed.
	b.	The earnings and profits of the corporation.
	c.	The basis of stock in the hands of the shareholder.
	d.	Whether the distributed property is received by an individual or a corporation.