10) What is Gilberts stock basis after the first year?

11) Refer to the data above. Assume that after two years, the corporation decides to sell the building contributed by Gilbert that it has used for its operating space during the first two years. The basis of the building at the time of sale is $200,000 and the net sales price received is $360,000 (part in cash and part for the buyers assumption of the remaining liability). At the time of the sale, Gilberts stock basis is $320,000. What is Gilberts stock basis after adjusting for the sale of the building? (REMEMBER, UNLIKE PARTNERSHIPS, S CORPORATIONS DO NOT PERFORM SPECIAL ALLOCATIONS OF TAXABLE INCOME AMONG THEIR SHAREHOLDERS TO COMPENSATE FOR BUILT-IN GAINS!)

Frank, Sara, and Gilbert form FSG Services, Inc., an corporation, by contributing the following properties: Basis Value Shareholder Frank Sara Property Cash Cash Equipment Land and Building 150,000 80,000 40,000 220,000 150,000 80,000 70,000 300,000 100,000 Gilbert Liability on building contributed by Gilbert assumed by corporation The three shareholders above own 30%, 30%, and 40% of the corporation respectively. Sara also loans the corporation $50,000 and the debt is evidenced by an executed corporate note. During the year, the corporation earns ordinary operating income before officer salaries of $400,000. Frank, Sara, and Gilbert earn officer salaries of $20,000, $100,000, and $140,000 respectively. In addition to these payments, each shareholder also takes a $20,000 cash distribution during the year. 10) What is Gilbert's stock basis after the first year? 11) Refer to the data above. Assume that after two years, the corporation decides to sell the building contributed by Gilbert that it has used for its operating space during the first two years. The basis of the building at the time of sale is $200,000 and the net sales price received is $360,000 (part in cash and part for the buyer's assumption of the remaining liability). At the time of the sale, Gilbert's stock basis is $320,000. What is Gilbert's stock basis after adjusting for the sale of the building? (REMEMBER, UNLIKE PARTNERSHIPS, S CORPORATIONS DO NOT PERFORM SPECIAL ALLOCATIONS OF TAXABLE INCOME AMONG THEIR SHAREHOLDERS TO COMPENSATE FOR BUILT-IN GAINS!) Frank, Sara, and Gilbert form FSG Services, Inc., an corporation, by contributing the following properties: Basis Value Shareholder Frank Sara Property Cash Cash Equipment Land and Building 150,000 80,000 40,000 220,000 150,000 80,000 70,000 300,000 100,000 Gilbert Liability on building contributed by Gilbert assumed by corporation The three shareholders above own 30%, 30%, and 40% of the corporation respectively. Sara also loans the corporation $50,000 and the debt is evidenced by an executed corporate note. During the year, the corporation earns ordinary operating income before officer salaries of $400,000. Frank, Sara, and Gilbert earn officer salaries of $20,000, $100,000, and $140,000 respectively. In addition to these payments, each shareholder also takes a $20,000 cash distribution during the year. 10) What is Gilbert's stock basis after the first year? 11) Refer to the data above. Assume that after two years, the corporation decides to sell the building contributed by Gilbert that it has used for its operating space during the first two years. The basis of the building at the time of sale is $200,000 and the net sales price received is $360,000 (part in cash and part for the buyer's assumption of the remaining liability). At the time of the sale, Gilbert's stock basis is $320,000. What is Gilbert's stock basis after adjusting for the sale of the building? (REMEMBER, UNLIKE PARTNERSHIPS, S CORPORATIONS DO NOT PERFORM SPECIAL ALLOCATIONS OF TAXABLE INCOME AMONG THEIR SHAREHOLDERS TO COMPENSATE FOR BUILT-IN GAINS!)