Frank, Sara, and Gilbert form FSG Services, Inc , an S corporation, by contributing the following properties ShareholderPropertyBasis ValueFrankCash150,000150,000SaraCash80,00080,000 Equipment40,00070,000GilbertLand and Building220,000300,000Liability on building contributed by Gilbert assumed by corporation 100,000 The three shareholders above own 30 , 30 , and 40 of the corporation respectively with Gilbert owning the 40 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 What is Franks basis for his stock at formation What is Saras basis in stock at formation What is Gilberts basis in stock at formation What is Saras basis for absorbing pass through losses at formation What is Gilberts stock basis after the first year 6 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 )

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Frank, Sara, and Gilbert form FSG Services, Inc., an S corporation, by contributing the following properties: ShareholderPropertyBasis ValueFrankCash150,000150,000SaraCash80,00080,000 Equipment40,00070,000GilbertLand and Building220,000300,000Liability on building contributed by

Frank, Sara, and Gilbert form FSG Services, Inc., an S corporation, by contributing the following properties:

ShareholderPropertyBasis ValueFrankCash150,000150,000SaraCash80,00080,000 Equipment40,00070,000GilbertLand and Building220,000300,000Liability on building contributed by Gilbert assumed by corporation 100,000

The three shareholders above own 30%, 30%, and 40% of the corporation respectively with Gilbert owning the 40%. 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.

What is Franks basis for his stock at formation?
What is Saras basis in stock at formation?
What is Gilberts basis in stock at formation?
What is Saras basis for absorbing pass-through losses at formation?
What is Gilberts stock basis after the first year?

6. 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!)