Five years ago, Kevin and his brother Matt formed Baldwin Corp.. a golf apparel manufacturing corporation. At that time, Kevin contributed $324,000 to thecorporation in exchange for 55% of its stock. During the current year, Kevin needed some cash to purchase a golf course so he sold a third of his interest in BaldwinCorp. for $81,000. He also sold stock in the following companies for the amounts indicated:(Click the icon to view the amounts and additional information)Read the requirementsRequirement a. What are the net gains and losses from the above items and their character? (If a box is not used in the table or the balance is "0" leave the boxempty; do not enter a zero. Enter a loss with a minus sign or parentheses.)Short-term gain (loss)Long-term gain (loss) Ordinary income (loss)Baldwin CorporationIBMMicrosoftTidal RadioWavetableDefaulted loanABC Corporation Five years ago, Kevin and his brother Matt formed Baldwin Corp., a golf apparel manufacturing corporation. At that time, Kevin contributed $324,000 to thecorporation in exchange for 55% of its stock. During the current year, Kevin needed some cash to purchase a golf course so he sold a third of his interest in BaldwinCorp. for $81,000. He also sold stock in the following companies for the amounts indicated(Click the icon to view the amounts and additional information.)Read the requirements.empty; do not enter a zero. EnBaldwin CorporationIBMMicrosoftTidal RadioWavetable.Defaulted loanABC CorporationSalaryNetiminalMore infoCorporationSales Proceeds Adjusted Basis18,00049,00013,00031,000$21,000 $35,00039,00027,000When Acquired52 months ago18 months ago7 months ago4 months ago- XIBMMicrosoftTidal RadioWavetableDuring the year Kevin hired a collection agency to collect a $22,000 loan he madeto an old friend, which was due in full on January 1 of the current year. The agencyfound no trace of his friend. Also during the year, ABC Corporation, in which heowns stock, went bankrupt. His investment was worth $93,000 on January 1, hepurchased it six years ago for $107.000, and he expects to receive only $12,000 inredemption of his stock. Finally, Kevin's salary for the year was $120,000 for hiswork as an associate professor.

Short TermItemGain or LossTidal Radio26000Wavetable-4000Non-Business bad debt-22000Net STCG0

Answered: Requirement a. What are the net gains…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter12: Corporations: Organization, Capital Structure, And Operating Rules

Section: Chapter Questions

Problem 27P

See similar textbooks

Similar questions

In 1980 John formed a farm business (corporation) by contributing a piece of farmland with an adjusted basis of $95,000 In exchange, he got 100 shares of stock, and was the only stockholder. Transaction pursuant to Section 1244. At the time of the transaction the farm was worth $140,000. In 1990 - John gifted 20 shares apiece to his two sons - Carl and Chris. These gifts at the time were valued at $27,000 each. John did not pay a gift tax on the shares. He wanted to reward his sons for their hard work as managers of the company and wanted to place some of the taxes of the business on them. Carl got bought out in exchange for a smaller field on the farm but was no longer involved in the family business. The field given to Carl was originally purchased for $10,000, and the present value is $12,000. Carl's shares were worth $12,000 at the time of the transfer. During the year of the transfer, the family farm earned $80,000. Questions: Perform the calculations if the transfer for Carl is…
Liam, a shareholder in Lager, Inc., (a C corporation), would like to sell 800 of his shares of stock in Lager. Since Lager is not traded on an exchange, the only way to sell is the stock is by having Lager redeem the stock. The fair market value of the 800 shares of stock is $200,000. Liam purchased the stock 10 years ago for $95/share. Lager has E&P of $700,000. The corporate stock in Lager is held as follows: Liam 2,000 shares Jennifer (Liam’s sister) 2,000 shares Katherine (Liam’s mother) 2,000 shares Beer Partnerships (Liam has a 30% interest) 4,000 shares 10,000 shares How do you calculate the 800 shares of Liam’s stock to be treated as a qualified stock redemption or will it be treated as a distribution?
Christopher regularly invests in internet company stocks, hoping to become wealthy by making an early investment in the next high-tech phenomenon. In 2012, Christopher purchased 3,000 shares of FlicksNet, a film rental company, for 15 per share shortly after the company went public. Because Christopher purchased the shares in their initial offering, the shares are qualified small business stock. In 2019, Christopher sold 800 of the shares (at 325 per share) so that he could purchase a reservation for a seat on 1-lon Musks first human mission to Mars. What regular income tax consequences and AMT consequences arise for Christopher as a result of the sale of these shares?
Ragan Thermal Systems, Inc., was founded nine years ago by brother and sister Carrington and Genevieve Ragan. The company manufactures and installs commercial heating, ventilation, and cooling (HVAC) units. Ragan has experienced rapid growth because of a proprietary technology that increases the energy efficiency of its systems. The company is equally owned by Carrington and Genevieve. The original agreement between the siblings gave each 50,000 shares of stock. In the event either wished to sell the stock, the shares first had to be offered to the other at a discounted price. Although neither sibling wants to sell any shares at this time, they have decided they should value their holdings in the company for financial planning purposes. To accomplish this, they have gathered the following information about their main competitors. Ragan Thermal Systems, Inc., Competitors EPS DPS Stock Price ROE Arctic Cooling, Inc. National Heating & Cooling Expert HVAC Corp. Industry average $.82 $.16…
Jason purchased 300 shares of the hodge and mattox energy fund. Each share cost 15.15. Fifteen months later, he decided to sell his shares when the share value reached 18.10. A what is the amount of his total initial investment? B what was the total amount Jason revived when he sold his shares in the hodge and mattox fund? C how much profit did he make on his investment?
Peter, Brian and Marc, three brothers, were co-owners of Bug-Zappers Inc. They each owned 1,000 shares in the business. Their adjusted cost base was $22 per share. After several years of success, their stock had increased in value to $34 per share, and they decided to execute a cross-purchase buy-sell agreement. In that agreement, they specified a fixed purchase price of $30 per share. This year, Marc died. At the time of his death, his shares were worth $40 each. Peter and Brian purchased his shares from his estate in accordance with the buy-sell agreement. What amount of taxable capital gain will be reported on Marc's final tax return?
. Leni was an incorporator in Dilaw Corporation (Dilaw for brevity), a corporation which Leni and her friends incorporated for the purpose of engaging in the call-center business. Leni invested P1 million as paid-up capital in Dilaw. After incorporation, Dilaw obtained a 10-year P5 million peso loan from Citibank. As security for the loan, Dilaw executed a real estate mortgage in favor of Citibank over its parcel of land in Dagupan City. Dilaw’s business did not prosper and it sustained heavy losses within 3 years from its incorporation. Leni wants the corporation to return her P1 million investment. The other stockholders have no objection to returning Leni’s investment to her. May the corporation return Leni’s investment to her? Explain. pls help me, thank youu
Sophia incorporated a company last year by investing an amount of $5 Million. For the expansion of her business, she needs to acquire additional funds from external sources at least for 5 years but she does not want to dilute her ownership in the business. Sophia should acquire the funds through which of the following sources of finance? Equity shares Both B and C Trade Credit Bonds
Tom and Davidson go into business together as a partnership selling computer software through the Internet. On January 1 they each put $6,000 as capital and this goes into their local bank account for the company. They bought computer equipment for $10,000 in which they paid by check and set up for business in Davidson's dad's basement. The cost of computer equipment will be amortized over the next three years with a disposable value of $1000. Davidson's dad has agreed to let them operate out of his basement if they pay him a rent of 10% of their annual profit or $1,200 per year whichever is greater. At the end of the first month of business, they have made no sales and incurred no expenses other than the amortization rate of the computer equipment and the rent which is owed to Davidson's dad. At the end of January, what is the accounting equation (assets, liabilities and equity)
Lassen Corporation sold a machine to a machine dealer for $20,000. Lassen bought the machine for $64,000 and has claimed $38,000 of depreciation expense on the machine. What gain or loss does Lassen realize on the transaction? Hannah Tywin owns 100 shares of MM Inc. stock. She sells the stock on December 11 for $25 per share. She received the stock as a gift from her Aunt Pam on March 20 of this year when the fair market value of the stock was $18 per share. Aunt Pam originally purchased the stock seven years ago at a price of $12 per share. What is the amount and character of Hannah’s recognized gain or loss on the stock?
I have answered this question and am looking to see if it is correct. Yvonne and Simon form Ion Corporation. Yvonne transfers equipment (basis of $110,000 and fair market value of $165,000). Simon invests $130,000 of cash. They each receive 100 shares in Ion Corporation, worth $130,000, but Yvonne also receives $35,000 of cash from Ion. Calculate Ion Corporation’s basis in the equipment. In addition, determine Yvonne and Simon’s basis in the Ion stock. Yvonne received cash, Ion Corporation subject to section 351 treatment. The gain which is recognized for Yvonne is the lower of the realized gain and the boot. The realized gain is $55,000 and the boot is $35,000 so the recognized gain for Yvonne is $35,000 Yvonne’s basis of stock is $110,000 Ion’s stock basis is $145,000 Simon’s stock basis is $130,000
In the current year, Dan, Jay, and Erin form Zeus Corporation. Dan contributes land (a capital asset) having a $75,000 FMV (fair market value) in exchange for 85 shares of Zeus stock. He purchased the land three years ago for $100,000. Jay contributes machinery (Sec. 1231 property purchased four years ago) having a $115,000 adjusted basis and a $45,000 FMV in exchange for 75 shares of Zeus stock. Erin contributes services worth $30,000 in exchange for 10 shares of Zeus stock. A. What is the amount of Dan's recognized gain or loss? b.What is Dan's basis in his Zeus shares? When does his holding period begin? c.What is the amount of Jay's recognized gain or loss? d. What is Jay's basis in his Zeus shares? When does his holding period begin? e.How much income, if any, does Erin recognize? f.What is Erin's basis in her Zeus shares? When does her holding period begin? g. What is Zeus's basis in the land and the machinery? When does its holding period begin? How…

SEE MORE QUESTIONS

Recommended textbooks for you

SWFT Essntl Tax Individ/Bus Entities 2020

Accounting

ISBN:

9780357391266

Author:

Nellen

Publisher:

Cengage

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

SWFT Essntl Tax Individ/Bus Entities 2020

Accounting

ISBN:

9780357391266

Author:

Nellen

Publisher:

Cengage

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

SWFT Individual Income Taxes

Accounting

ISBN:

9780357391365

Author:

YOUNG

Publisher:

Cengage

Individual Income Taxes

Accounting

ISBN:

9780357109731

Author:

Hoffman

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SWFT Corp Partner Estates Trusts

Accounting

ISBN:

9780357161548

Author:

Raabe

Publisher:

Cengage

SEE MORE TEXTBOOKS