Kevin and bob have owned and operated soa as a c

Assignment Help Accounting Basics

Reference no: EM13609870

Kevin and Bob have owned and operated SOA as a C corporation for a number of years. When they formed the entity, Kevin and Bob each contributed $100,000 to SOA. They each have a current basis of $100,000 in their SOA ownership interest. Information on SOA's assets at the end of year 5 is as follows (SOA does not have any liabilities): Assets FMV Adjusted Basis Built-in Gain Cash $200,000 $200,000 $0 Inventory $80,000 $40,000 $40,000 Land and Bldg $220,000 $170,000 $50,000 Total $500,000 At the end of year 5, SOA liquidated and distributed half of the land, half of the inventory, and half of the cash remaining after paying taxes (if any) to each owner. Assume that, excluding the effects of the liquidating distribution, SOA's taxable income for year 5 is $0. Also, assume that if SOA is required to pay tax, it pays at a flat 30 percent tax rate.

a. What is the amount and character of gain or loss SOA will recognize on the liquidating distribution? Distribution of the inventory Distribution of the land and building

b. What is the amount and character of gain or loss Kevin will recognize when he receives the liquidating distribution of cash and property? Recall that his stock basis is $100,000 and he is treated as having sold his stock for the liquidation proceeds.

Reference no: EM13609870

Questions Cloud

A grinding wheel accelerates uniformly from rest to 3450 : q1. a wheel ofdiameter 30 cmturns through10.5 revolutionswhile rolling without slipping on a surface. what distance

Steam enters a well-insulated nozzle at 300lbfin2 600 : steam enters a well-insulated nozzle at 300lbfin2 600 degrees f with a velocity of 100 fts and exits at 40 lbfin2 with

Presented here are the comparative balance sheets of hames : presented here are the comparative balance sheets of hames inc. at december 31 2011 and 2010. sales for the year ended

For each of the following transactions below prepare the : for each of the following transactions below prepare the journal entry if one is required to record the initial

Kevin and bob have owned and operated soa as a c : kevin and bob have owned and operated soa as a c corporation for a number of years. when they formed the entity kevin

The companys tax rate is 30 for tax purposes the entire : morgado inc. has provided the following data to be used in evaluating a proposed investment projectinitial investment

The length of the conductor in the magnetic field is 15 ft : the angle between the direction of motion of a conductor and the lines of flux is 30deg. the length of the conductor in

Hoop is organized as a c corporation and damarcus works : damarcus is a 50 percent owner of hoop a business entity. in the current year hoop reported a 100000 business loss.

1 let pn be the probability that three consecutive heads : 1 let pn be the probability that three consecutive heads will not appear in n tosses of a fair coin.a show that pn 12

User Account

All Pages