1) Lori Anne (age 40) incorporates her CPA firm by transferring her computer equipment (basis of $116,000, FMV of $37,000) to her newly formed corporation, Bean Counters, Inc., in exchange for all 13,000 shares of Bean Counters stock, worth $95,000. Bean Counters also assumed Lori Annes $67,000 of liabilities. $62,000 of the liabilities was business related; the remaining $5,000 was Lori Annes debt to a local tabloid that promised not to expose her clandestine, interoffice affair with her much younger employee, Mickey (age 22). Lori Anne is the sole shareholder. How much gain, if any, must Lori Anne recognize on the incorporation?

a: $46,000

b: $62,000

c: $5,000

d: some other amount (your answer) _________________

2) How much is Bean Counters Inc.s basis in the property transferred from Lori Anne?

a: $162,000

b: $116,000

c: $95,000

d: some other amount (your answer) _________________

3) How much is Lori Annes basis in her Bean Counters stock?

a: $162,000

b: $116,000

c: $95,000

d: some other amount (your answer) _________________

4) Corinne contributes her land, (basis of $78,000, fair market value of $190,000), for 24,000 shares of Legal Aces, Inc. stock, worth $123,000. The corporation also assumed Corinnes $67,000 of business debts. Corinnes sister, Stunning Sandy, owns the other 6,000 shares, worth $60,000. Stunning Sandy contributed services to the corporation (basis of $0, & FMV of $54,000), along with $6,000 cash. What result?

a: Corinne has a recognized gain of $112,000; Sandy has a recognized gain of $54,000.

b: Corinne has a recognized gain of $0; Sandy has a recognized gain of $54,000.

c: Neither Corinne nor Sandy has any recognized gain on this transaction.

d: None of the above.

5) In a Section 351 transaction, the transferee corporation takes a basis in property received equal to:

a: The fair market value of the property contributed plus the shareholders realized gain.

b: The basis of the property contributed plus the shareholders realized gain.

c: The basis of the shareholders stock plus the shareholders recognized gain.

d: None of the above.

6) To incorporate his business, Blyden contributes his warehouse (basis of $260,000, FMV of $540,000) in exchange for 20,000 shares of Blyden Corporation as the sole shareholder, worth $373,000 along with $44,000 cash The corporation also assumes his business related liabilities in the amount of $139,000. Blydens recognized gain amounts to:

a: $0

b: $296,000

c: $44,000

d: some other amount (your answer) _________________

a) Alvin contributes real estate (FMV = $224,000; Basis = $95,000) in exchange for 15,200 shares of Kabot Corporation stock, FMV = $224,000. Alvins sister, Lila contributes accounting services (FMV = $154,000; Basis =$0), along with $13,000 cash, for 4800 shares of Kabot, Inc. stock, FMV = $160,000. Has the 80% control requirement been satisfied?Explain (in 2 sentences or less) why or why not.

b) Hogan Company reported the following activity in the current year:

Gross Profit $900,000

Operating Expenses $650,000

Dividends Received from 25% owned corporation $44,000

Dividends Received from 10% owned corporation $34,000

Required: Calculate the Dividends Received Deduction in the above situation.