Problem 18-30 (LO. 1, 2) 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? , because transferred has of Patricia's stock is counted in determining control since the property she than a nominal value in comparison to the value of the services rendered. b. What are the tax consequences to Dan and Patricia? Dan recognizes on the transfer of the land. His basis in the Crane stock is $ on the transfer. Patricia has a basis of $ . Patricia recognizes in her Crane stock. of $ c. What is Crane Corporation's basis in the land and the machinery? Crane Corporation has a basis of $ in the land and a basis of $ in the machinery. In addition, Crane either has of $ for the services provided by Patricia, or it will capitalize the as d. Enter the results of this transaction to Patricia on her Form 1040 (page 1). Assume Patricia is single, age 40, has no other income, and claims a standard deduction of $12,550 (for 2021). She does not want $3 to go to the presidential election campaign. Enter all amounts as positive numbers. Form Department of the Treasury-Internal Revenue Service (99) 1040 u.s. Individual Income Tax Return Filing Status Your first name and middle initial Patricia Last name Chen If joint return, spouse's first name and middle initial Last name 2021 OMB No. 1545-0074 IRS Use Only Your social security number 123-45-6789 Spouse's social security number Home address (number and street). If you have a P.O. box, see instructions. Apt. no. City, town, or post office. If you have a foreign address, also complete spaces below. State ZIP code Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. Checking a box below will not change your tax or refund. Foreign country name Foreign province/state/county Foreign postal code At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency? Standard Deduction Age/Blindness Someone can claim: You: Spouse: Dependents (see instructions): number If more than four (1) First name Last name (2) Social security (3) Relationship to you Child tax credit (4) if qualifies for (see instructions): Credit for other dependents dependents, see instructions and check here o 1 Wages, salaries, tips, etc. Attach Form(s) W-2.. 1 Attach 2a Tax-exempt interest . . 2a b Taxable interest. 2b Sch. B if required. 3a Qualified dividends . . . b Ordinary dividends. 3b 4a IRA distributions . . . . . 5a Pensions and annuities 4a b Taxable amount. 4b 5a b Taxable amount. 5b Standard 6a Social security benefits 6a b Taxable amount. 6b Deduction for- 7 Capital gain or (loss). Attach Schedule D if required. If not required, check here . . . 7 Single or Married filing 8 Other income from Schedule 1, line 10. 8 separately, 9 Add lines 1, 2b, 3b, 4b, 5b, 6b, 7, and 8. This is your total income. $12,550 Married filing 10 Adjustments to income from Schedule 1, line 26... jointly or Qualifying 11 Subtract line 10 from line 9. This is your adjusted gross income. 9 10 11 widow(er), $25,100 12a Standard deduction or itemized deductions (from Schedule A)... c Add lines 12a and 12b. Head of household, $18,800 If you checked any box under Standard Deduction, see instructions. 13 Qualified business income deduction from Form 8995 or Form 8995-A. 14 Add lines 12c and 13.. 15 Taxable income. Subtract line 14 from line 11. If zero or less, enter -0- 12a b Charitable contributions if you take the standard deduction (see instructions)... 12b 12c 13 14 15 For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No.11320B Form 1040 (2021)