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what is the answer to this? A. T and A - old friends - meet up with old college professor R. They are concemed about
what is the answer to this?
A. T and A - old friends - meet up with old college professor R. They are concemed about potential liability to them - They are starting a real estate corporation near Goldey, to provide off campus housing. They will call it GBC APT CORP ("GAC"). T brings an apartment building he owns - worth $900,000 ( $100,000 basis). A brings an apartment building he owns - worth $900,000 ( $300,000 basis). Both T and A have other jobs, so R will manage the day-to-day operations, for which he will be paid with stock valued at $200,000 for one year of services. T and A both exchange their buildings for 45% of the stock of GAC. R gets 10% of the GAC stock. For legal liability protection, they decide to incorporate the business into a company called TAR Corp ("TAR"). T gets 45,000 shares. A gets 45,000 shares, R will get 10,000 shares. So, 100,000 shares of GAC will be issued and outstanding! 1. What are the tax consequences to each of the parties - WHAT IS T'S REALIZED GAIN? WHAT IS HIS RECOGNIZED GAIN? WHAT IS A'S REALIZED GAIN? WHAT IS A'S RECOGNIZED GAIN? WHAT IS R'S INCOME THAT GETS TAXED WHEN HE GETS PAID, with STOCK, FOR PROVIDING SERVICES? 2. What will be T's basis in the GAC stock? 3. What will be A's basis in the GAC stock? 4. What will be R's basis in the GAC stock? 5. What basis will GAC CORP have in the building that it got from T? 6. What basis will GAC CORP have in the building it got from A Step by Step Solution
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