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 1040 (2018) Page 2 1 2a Wages, salaries, tips, etc. Attach Form(s) W-2. Tax-exempt interest za Qualified dividends 3a b b Taxable interest Ordinary dividends 4a IRAs, pensions, and annuities 4a Attach Form(s) W- 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. b Taxable amount 5a Social security benefits 5a b Taxable amount Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 6 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 Qualified business income deduction (see instructions) ................ Standard Deduction for- Single or married filing separately, $12,000 Married filing Tjointly or Qualifying 9 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O-.... 10 11 _(check if any from: 1 Form(s) 8814 2 Form 4972 a Tax (see inst) 30 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. Form 1040 (2018) Page 2 1 2a Wages, salaries, tips, etc. Attach Form(s) W-2. Tax-exempt interest za Qualified dividends 3a b b Taxable interest Ordinary dividends 4a IRAs, pensions, and annuities 4a Attach Form(s) W- 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. b Taxable amount 5a Social security benefits 5a b Taxable amount Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 6 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 Qualified business income deduction (see instructions) ................ Standard Deduction for- Single or married filing separately, $12,000 Married filing Tjointly or Qualifying 9 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter-O-.... 10 11 _(check if any from: 1 Form(s) 8814 2 Form 4972 a Tax (see inst) 30 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