TCO B) John forms a corporation and transfers property having a basis to him of
ID: 2361538 • Letter: T
Question
TCO B) John forms a corporation and transfers property having a basis to him of $18,000 and a fair market value of $26,000 to the corporation for 1,000 shares of $10 par stock. One year later, Hal transfers property having a basis to him of $2,500 and a fair market value of $3,500 for 100 shares of the stock. Hal is not related to John. The corporation issued no other stock. (a) How much gain does John recognize on his exchange? What is the basis to John of his 1,000 shares? (b) What gain or loss is recognized by the corporation when it issues its shares to John? What is the basis to the corporation of the property it received from John? (c) How much gain does Hal recognize on his exchange? What is the basis to Hal of his 100 shares? (Points : 17)Explanation / Answer
XYZ Company had a net loss of $90,000 from operations in 2007. Tina owns XYZ and works 20 hours a week in the business. She has a large amount of income from other sources and is in the 33% marginal tax bracket. Would Tina's tax situation be better if XYZ were a proprietorship or a C corporation?
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