Kirby transfers property, basis of S20,000 and valus of $3 38. Kirby and Helen f
ID: 2557635 • Letter: K
Question
Kirby transfers property, basis of S20,000 and valus of $3 38. Kirby and Helen form Red Corporation. for 100 shares in Red Corporation. Helen transfers property, basis of $40,000 and value of $280.00 egail services in organizing the corporation. The value of her services is $20,000. In re Helen receives 100 shares in Red Corporation. With respect to the transfers: a. Kirby will recognize gain. b. Helen will not recognize any gain or income. C. Red Corporation will have a basis of $280,000 in the property it acquired from Helen. e. None of the above. Joe and Kay form Gull Corporation. Joe transfers cash of $250,000 for 200 shares in Gull Corporation. Kay transfers property with a basis of $50,000 and fair market value of $240,000. She agrees to accept 200 shares in Gull Corporation for the property and for providing bookkeeping services to the corporation in its first year of operation. The value of Kay's services is $10,000. With respect to the transfer a. Gull Corporation has a basis of $240,000 in the property transferred by Kay. b. Neither Joe nor Kay recognizes gain or income on the exchanges. c. Gull Corporation has a business deduction under $ 162 of S10,000. d. Gull capitalizes $10,000 as organizational costs. e. None of the above. 39. 40. Four individuals form Chickadee Coporation under $351. Two of these individuals, Jane and Walt, made the following contributions: Fair Market Adjusted Basis From Jane- Cash Patent S360,000 40,000 $360,000 From Walt- Equipment (depreciation claimed of S100,000) 240,000 370,000 Both Jane and Walt receive stock in Chickadee Corporation equal to the value of their investments. a. Jane must recognize income of$40,000, walt has no income. b. Neither Jane nor Walt recognize income. c. Walt must recognize income of $130,000; Jane has no income. d. Walt must recognize income of $100,000; Jane has no income. e. None of the above city donates land (fair market value of $250,000) and cash of S50,000 to the corporation. Within several months of the donation, Parakeet Corporation spends $350,000 (which includes the $$0,000 received from Oxford) on the construction of a new plant located on the donated land a. Parakeet recognizes income of S50,000 as to the donation. b. Parakeet has a zero basis in the land and a basis of $350,000 in the plant. c Parakeet recognizes income of $300,000 as to the donation. 41. In order to induce Parakeet Corporation to build a new manufacturing facility in Oxford, Mississippi, the 10Explanation / Answer
Hi as per chegg policy I am answering only the first question. Please post rest questions separately.
Q.38) In the case the following are the outcomes:
(i) Kirby will not recognize any gain.
(ii) Helens income is $20,000 for legal services rendered to the firm.
(iii) Red corporation will have a basis of $40,000 in the property it acquired from Helen.
(iv) A business deduction of $20,000 is not allowed to Red Corporation and the same must be capitalized as organizational expense.
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