Question
In October 2010, Jose acquired 100% of Acorn Corporation common stock by transferring property with an adjusted basis of $1,000,000 and fair market value of
In October 2010, Jose acquired 100% of Acorn Corporation common stock by transferring property with an adjusted basis of $1,000,000 and fair market value of $4,000,000. Acorn is a qualified small business cor- poration. On April 1, 2016, Jose sells all of the Acorn Corporation common stock for $16,000,000.
a. What is the amount of gain that may be excluded from Joses gross income?
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What would your answer be if the fair market value of the Acorn stock were only
$800,000 upon its issue?
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What would your answer be if the stock were sold after two years?
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Can Jose avoid recognizing gain by purchasing replacement stock?
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Leading The Digital Workforce Internal Audit And IT Audit
Authors: Jeffrey W. Brown
1st Edition
1032323736, 978-1032323732
