Jack, Jill, and Jim seek to form a C corporation, with each being equal one third owners The FMV of each shareholders new stock is $75,000 Jack contributed land with a basis of $50,000 and a FMV of $75,000 Jill contributed equipment with a basis of $35,000 and a FMV of $60,000, plus cash of $15,000 Jim will be credited with $75,000 of services rendered in organizing the enterprise What is Jack and Jills stock basis a $50,000 and $35,000 b $75,000 and $75,000 c $50,000 and $50,000 d $50,000 and $20,000 Tracy and Lance, equal shareholders in Macaw Corporation, receive $600,000 each in distributions on December 31 of the current year Macaws current year taxable income is $1 million and it has no accumulated E P Last year, Macaw sold an appreciated asset for $1,200,000 (basis of $400,000) Payment for one half of the sale of the asset was made this year How much of just Tracys distribution will be taxed as a dividend Disregard any interest on the installment obligation a $0 b $300,000 c $500,000 d $600,000 e None of the above As of January 1, Cassowary Corporation has a deficit in accumulated E P of $100,000 For the tax year, current E P is $240,000 (prior to any distributions) On July 1, Cassowary Corporation distributes a one time distribution of $275,000 to its sole shareholder The amount of the distribution that is a taxable dividend is a $35,000 b $140,000 c $240,000 d $275,000 e None of the above A and B organized Newco, Inc A contributed a building with a basis of $40,000 and a FMV of $82,000 in exchange for 60 of the common stock B contributed land with a basis of $5,000 and a FMV of$48,000 in exchange for 40 of its capital stock The building contributed by A was subject to a $10,000 mortgage which Newco assumed As recognized gain on the exchange is a $0 b $10,000 c $42,000 d $52,000 In the preceding problem, what is Newcos basis in the building contributed by A a $30,000 b $40,000 c $72,000 d $82,000 In the preceding problem 8, what is As basis in his stock a $82,000 b $40,000 c $30,000 d $72,000

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Jack, Jill, and Jim seek to form a C corporation, with each being equal one-third owners. The FMV of each shareholders new stock is $75,000. Jack contributed land with a basis of $50,000 and a FMV of $75,000. Jill contributed equipment with a basis of $35,000 and a FMV of $60,000, plus cash of $15,000. Jim will be credited with $75,000 of services rendered in organizing the enterprise. What is Jack and Jills stock basis?

a. $50,000 and $35,000

b. $75,000 and $75,000

c. $50,000 and $50,000

d. $50,000 and $20,000

Tracy and Lance, equal shareholders in Macaw Corporation, receive $600,000 each in distributions on December 31 of the current year. Macaws current year taxable income is $1 million and it has no accumulated E & P. Last year, Macaw sold an appreciated asset for $1,200,000 (basis of $400,000). Payment for one-half of the sale of the asset was made this year. How much of just Tracys distribution will be taxed as a dividend? Disregard any interest on the installment obligation.

As of January 1, Cassowary Corporation has a deficit in accumulated E & P of $100,000. For the tax year, current E & P is $240,000 (prior to any distributions). On July 1, Cassowary Corporation distributes a one time distribution of $275,000 to its sole shareholder. The amount of the distribution that is a taxable dividend is:

A and B organized Newco, Inc. A contributed a building with a basis of $40,000 and a FMV of $82,000 in exchange for 60% of the common stock. B contributed land with a basis of $5,000 and a FMV of$48,000 in exchange for 40% of its capital stock. The building contributed by A was subject to a $10,000 mortgage which Newco assumed. As recognized gain on the exchange is:

a. $0

b. $10,000

c. $42,000

d. $52,000