Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ACCT 540 Corporate Formations Problem Mary and Todd form the MT Corporation, with a transfer of the following properties: Mary $200,000 cash Todd $200,000 FMV

ACCT 540

Corporate Formations Problem

Mary and Todd form the MT Corporation, with a transfer of the following properties:

Mary $200,000 cash

Todd $200,000 FMV property

$35,000 tax basis

Mary will receive 50% and Todd 50% of the corporate stock.

Complete the following

Mary Todd

Realized gain ________ ________

Recognized gain ________ _________

Basis of Stock _________ _________

MT basis in contributed asset __________ _________

VARIATION 1: Return to original facts (same basis). Todds property is valued at $220,000 but is contributed subject to a $20,000 liability.(This means that Todd still contributes equity of $200,000 so it is still a 50/50 split of ownership.

Complete the following

Mary Todd

Realized gain ________ ________

Recognized gain ________ _________

Basis of stock _________ _________

MT basis in contributed asset __________ _________

VARIATION 2: Same as Variation 1 (same basis) except Todds property is valued at $260,000 and is contributed subject to a liability of $60,000. (Again, Todd contributes $200,000 of equity)

Complete the following

Mary Todd

Realized gain ________ ________

Recognized gain ________ _________

Basis of stock _________ _________

MT basis in contributed asset __________ _________

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Theory Practice And Techniques In Bookkeeping Accounting And Auditing

Authors: N/A,

1st Edition

1680947761, 978-1680947762

More Books

Students also viewed these Accounting questions

Question

Define procedural justice. How does that relate to unions?

Answered: 1 week ago