Correct the mistake i made please.

Problem 18-30 (LO. 1) Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth $200,000, basis of $60,000) for 50% of the stock in Crane. Patricia transfers machinery (worth $150,000, adjusted basis of $30,000) and provides services worth $50,000 for 50% of the stock. a. Will the transfers qualify under $ 351? Yes , because all of Patricia's stock is counted in determining control since the property she transferred has more nominal value in comparison to the value of the services rendered. than a Feedback Check My Work Nonrecognition treatment for the property transferors may be lost if "too much" stock is transferred to persons who did not contribute property. b. What are the tax consequences to Dan and Patricia? Dan recognizes no gain or loss on the transfer of the land. His basis in the Crane stock is $ a capital gain X of $ 50,000 on the transfer. Patricia has a basis of $ 30,000 60,000 . Patricia recognizes X in her Crane stock. Feedback Check My Work Partially correct c. What is Crane Corporation's basis in the land and the machinery? Crane Corporation has a basis of $ 60,000 in the land and a basis of $ 30,000 in the machinery. of $ 0 x for the services provided by Patricia, or it will capitalize the In addition, Crane either has a deduction $ 0 x as a contribution X d. Enter the results of this transaction to Patricia on her Form 1040. Assume Patricia is single, has no other income, and claims a standard deduction of $12,000. Enter all amounts as positive numbers. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing status: Single Your first name and initial Last name Patricia Chen Your standard deduction: Someone can claim you as a dependent X Your social security number 123-45-6789 If joint return, spouse's first name and initial Last name Spouse's social security number - Full-year health care coverage or Spouse standard deduction: Someone can claim your spouse as a dependent x exempt (see inst.) Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign (see inst.) You - Spouse City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. If more than four dependents, see inst. and here 0 Dependents (see instructions): (2) Social security number (3) Relationship to you (4) Vif qualifies for (see inst.): (1) First name Last name Child tax credit Credit for other dependents | 0 0 0 0 Sign Here Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Protection PIN, enter it here (see inst.) Joint return? See instructions. Keep a copy for your records. Date Spouse's occupation Spouse's signature. If a joint return, both must sign. If the IRS sent you an Identity Protection PIN, enter it here (see inst.) || Preparer's name Preparer's signature PTIN Firm's EIN Paid Preparer Use Only Check if: - 3rd Party Designee Firm's name Phone no. Firm's address Self- employed For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2018) Form 1040 (2018) Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2.... ......... 1 OX 2a za b 2b Taxable interest Ordinary dividends 3a b Tax-exempt interest Qualified dividends IRAs, pensions, and annuities 4a b Attach Form(s) W- 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. Taxable amount 5a Social security benefits b Taxable amount Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6............ 8 Standard deduction or itemized deductions (from Schedule A) .......... 12,000 9 Qualified business income deduction (see instructions) ................ Standard Deduction for- Single or married Tiling separately, $12,000 Married filing Tiointly or Oualifvina 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter -- .... 10 11 (check if any from: 1 - Form(s) 8814 2 Form 4972 a Tax (see inst) 30 Qualified business income deduction (see instructions) ........ Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O-... | 10 DeuullIUI IUI- Single or married arried 9 filing separately, 10 $12,000 Married filing 11 jointly or Qualifying widow(er), $24,000 Head of 12 household, $18,000 13 If you checked 14 any box under Standard 15 deduction, see 16 instructions. 17 a Tax (see inst) __(check if any from: 1 - Form(s) 8814 2 - Form 4972 30 b Add any amount from Schedule 2 and check here ............... . a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here ........ Subtract line 12 from line 11. If zero or less, enter-O- ....... Other taxes. Attach Schedule 4 .. Total tax. Add lines 13 and 14 ......... ............. Federal income tax withheld from Forms W-2 and 1099........... Refundable credits: a EIC (see inst.)_ b Sch. 8812_ c Form 8863 Add any amount from Schedule 5 18 Add lines 16 and 17. These are your total payments .............. Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here Direct deposit? See instructions. b Routing number | Type: - Checking - Savings d Account number I I II|| 21 Amount of line 19 you want applied to your 2019 estimated tax ..... 22 22 Am Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions .. 23 Estimated tax penalty (see instructions) ..... 23 Amount You Owe Go to www.irs.gov/Form1040 for instructions and the latest information. Form 1040 (2018) Problem 18-30 (LO. 1) Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth $200,000, basis of $60,000) for 50% of the stock in Crane. Patricia transfers machinery (worth $150,000, adjusted basis of $30,000) and provides services worth $50,000 for 50% of the stock. a. Will the transfers qualify under $ 351? Yes , because all of Patricia's stock is counted in determining control since the property she transferred has more nominal value in comparison to the value of the services rendered. than a Feedback Check My Work Nonrecognition treatment for the property transferors may be lost if "too much" stock is transferred to persons who did not contribute property. b. What are the tax consequences to Dan and Patricia? Dan recognizes no gain or loss on the transfer of the land. His basis in the Crane stock is $ a capital gain X of $ 50,000 on the transfer. Patricia has a basis of $ 30,000 60,000 . Patricia recognizes X in her Crane stock. Feedback Check My Work Partially correct c. What is Crane Corporation's basis in the land and the machinery? Crane Corporation has a basis of $ 60,000 in the land and a basis of $ 30,000 in the machinery. of $ 0 x for the services provided by Patricia, or it will capitalize the In addition, Crane either has a deduction $ 0 x as a contribution X d. Enter the results of this transaction to Patricia on her Form 1040. Assume Patricia is single, has no other income, and claims a standard deduction of $12,000. Enter all amounts as positive numbers. Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing status: Single Your first name and initial Last name Patricia Chen Your standard deduction: Someone can claim you as a dependent X Your social security number 123-45-6789 If joint return, spouse's first name and initial Last name Spouse's social security number - Full-year health care coverage or Spouse standard deduction: Someone can claim your spouse as a dependent x exempt (see inst.) Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign (see inst.) You - Spouse City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. If more than four dependents, see inst. and here 0 Dependents (see instructions): (2) Social security number (3) Relationship to you (4) Vif qualifies for (see inst.): (1) First name Last name Child tax credit Credit for other dependents | 0 0 0 0 Sign Here Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Protection PIN, enter it here (see inst.) Joint return? See instructions. Keep a copy for your records. Date Spouse's occupation Spouse's signature. If a joint return, both must sign. If the IRS sent you an Identity Protection PIN, enter it here (see inst.) || Preparer's name Preparer's signature PTIN Firm's EIN Paid Preparer Use Only Check if: - 3rd Party Designee Firm's name Phone no. Firm's address Self- employed For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B Form 1040 (2018) Form 1040 (2018) Page 2 1 Wages, salaries, tips, etc. Attach Form(s) W-2.... ......... 1 OX 2a za b 2b Taxable interest Ordinary dividends 3a b Tax-exempt interest Qualified dividends IRAs, pensions, and annuities 4a b Attach Form(s) W- 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. Taxable amount 5a Social security benefits b Taxable amount Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6............ 8 Standard deduction or itemized deductions (from Schedule A) .......... 12,000 9 Qualified business income deduction (see instructions) ................ Standard Deduction for- Single or married Tiling separately, $12,000 Married filing Tiointly or Oualifvina 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter -- .... 10 11 (check if any from: 1 - Form(s) 8814 2 Form 4972 a Tax (see inst) 30 Qualified business income deduction (see instructions) ........ Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O-... | 10 DeuullIUI IUI- Single or married arried 9 filing separately, 10 $12,000 Married filing 11 jointly or Qualifying widow(er), $24,000 Head of 12 household, $18,000 13 If you checked 14 any box under Standard 15 deduction, see 16 instructions. 17 a Tax (see inst) __(check if any from: 1 - Form(s) 8814 2 - Form 4972 30 b Add any amount from Schedule 2 and check here ............... . a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here ........ Subtract line 12 from line 11. If zero or less, enter-O- ....... Other taxes. Attach Schedule 4 .. Total tax. Add lines 13 and 14 ......... ............. Federal income tax withheld from Forms W-2 and 1099........... Refundable credits: a EIC (see inst.)_ b Sch. 8812_ c Form 8863 Add any amount from Schedule 5 18 Add lines 16 and 17. These are your total payments .............. Refund 19 If line 18 is more than line 15, subtract line 15 from line 18. This is the amount you overpaid 20a Amount of line 19 you want refunded to you. If Form 8888 is attached, check here Direct deposit? See instructions. b Routing number | Type: - Checking - Savings d Account number I I II|| 21 Amount of line 19 you want applied to your 2019 estimated tax ..... 22 22 Am Amount you owe. Subtract line 18 from line 15. For details on how to pay, see instructions .. 23 Estimated tax penalty (see instructions) ..... 23 Amount You Owe Go to www.irs.gov/Form1040 for instructions and the latest information. Form 1040 (2018)