Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Robin, Marc, and Pete form Knights Consulting Corporation with the following consideration: Adjusted Fair Market Basis Value From Robin Cash $40,000 $40,000 Inventory 400,000 440.000

image text in transcribed
image text in transcribed
Robin, Marc, and Pete form Knights Consulting Corporation with the following consideration: Adjusted Fair Market Basis Value From Robin Cash $40,000 $40,000 Inventory 400,000 440.000 From Marc Land and building 200,000 260,000 From Pete- -0- 80,000 Legal and management services Knights Consulting Corporation issues 2.000 shares of stock as follows: 1.200 to Robin, 600 to Marc, and 200 to Pete. In addition, Marc receives $20,000 in cash from Knights. Each share of stock is worth $400 per share. Do Robin, Marc or Pete each recognize gain or loss for income)? If yes, how much do each recognize, if any? Knights Consulting Corporation issues 2,000 shares of stock as follows: 1.200 to Robin, 600 to Marc, and 200 to Pete. In addition, Marc receives $20,000 in cash from Knights. Each share of stock is worth $400 per share. Do Robin, Marc or Pete each recognize gain or loss (or income)? If yes, how much do each recognize, if any? b. What tax basis do Robin, Marc and Pete each have in their Knights Consulting Corporation stock received? Robin, Marc, and Pete form Knights Consulting Corporation with the following consideration: Adjusted Fair Market Basis Value From Robin Cash $40,000 $40,000 Inventory 400,000 440.000 From Marc Land and building 200,000 260,000 From Pete- -0- 80,000 Legal and management services Knights Consulting Corporation issues 2.000 shares of stock as follows: 1.200 to Robin, 600 to Marc, and 200 to Pete. In addition, Marc receives $20,000 in cash from Knights. Each share of stock is worth $400 per share. Do Robin, Marc or Pete each recognize gain or loss for income)? If yes, how much do each recognize, if any? Knights Consulting Corporation issues 2,000 shares of stock as follows: 1.200 to Robin, 600 to Marc, and 200 to Pete. In addition, Marc receives $20,000 in cash from Knights. Each share of stock is worth $400 per share. Do Robin, Marc or Pete each recognize gain or loss (or income)? If yes, how much do each recognize, if any? b. What tax basis do Robin, Marc and Pete each have in their Knights Consulting Corporation stock received

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

South-Western Federal Taxation 2020 Comprehensive

Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman

43rd Edition

357109147, 978-0357109144

More Books

Students also viewed these Accounting questions

Question

What are the organizations task goals on this issue?

Answered: 1 week ago