How would you advise parties to structure the transaction

Assignment Help Accounting Basics
Reference no: EM132051399

Question - PLEASE ANSWER IN TAX MEMO FORM

Donald Trump Corporation is currently owned by three individuals, Trump, Bush, and Clinton. The corporation has a net worth of $750,000 and has 500 shares (1,000 shares authorized) of common stock outstanding.

Trump owns 200 shares (40 percent), and Bush and Clinton each own 150 shares (30 percent).

Bernie Sanders owns land worth $90,000 which the corporation could use as a new plant site. Bernie's tax basis in the land is only $20,000. Bernie is not interested in selling the land because it would result in a large capital gain tax. Bernie is willing to transfer the land to the corporation in exchange for 60 shares of its common stock or securities of equivalent value, but only if the transfer will be nontaxable.

Question: How would you advise the parties to structure the transaction?

Reference no: EM132051399

Questions Cloud

What is filtrate : What is filtrate? What does it contain? Filtrate is the waste product created from the kidneys which eventually becomes urine. It contains metabolic waste
Relationship between tests of acquisition and payment cycle : Describe the relationship between tests of acquisition and payment cycle and tests of inventory
What is the 2015 cash flow to stockholders : In addition, you're told that the firm issued $4,700 in new equity during 2015 and redeemed $3,200 in outstanding long-term debt.
What is an example of something that comes from a farm : What is an example of something that comes from a farm that is considered pollution?
How would you advise parties to structure the transaction : Donald Trump Corporation is currently owned by three individuals, Trump, Bush, and Clinton. How would you advise the parties to structure the transaction
How do they manage to respire : During the evolutionary process, why do you think there was a correlation between brain size increasing while cecum size decreased in the omnivores?
Calculate the cost of each of the capital components : It can issue preferred stock that pays a constant dividend of $3 per year at $40 per share.
Does applying a topical steroid cream lower : Does applying a topical steroid cream lower make a person more susceptible to the common cold due to it suppressing
How much do you need to invest today : You are planning to retire in 15 years with $1,000,000. You can earn 13% compounded monthly. How much do you need to invest today

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd