blem 29. (10 points) Sandy performs legal services as part of the organization o
ID: 2561385 • Letter: B
Question
blem 29. (10 points) Sandy performs legal services as part of the organization of a corporation. receives 10% ofthe corpo other sharcholders, part of a prearr rate stock, which has a fair market value of $20,000, and a par value of $250. The anged plan all transfer property for 90% ofthe corporate stock. y does Sandy recognize? b) What is Sandy's tax basis in her corporate stoc k? at are the tax consequences to the corporation upon the issuance of stock (i.e. deductible i later, amortizable, etc)?Explanation / Answer
a) $20000 Fair Value of Common stock will be Income
b) that will be Taxable under Business & Profession Income
c) Deductible Immediately, since Stock is Against Expense hence it allowable in same period
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