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What are the tax consequences to Bill, Charlie, and Tom Co

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Question - Bill decided to incorporate his printing business and to give his manager, Charlie, a share in the business. Bill's sole proprietorship transferred the following to Tom Co.:

 

Basis

Value

Accounts payable

$0

$7,000

Accounts receivable

0

8,000

Printing press

6,000

10,000

Truck

24,000

20,000

Cash

2,000

2,000

Bill received 70 shares of the stock, worth $29,000. Charlie invested $2,000 in cash and received the remaining 30 shares of the stock.

Required - What are the tax consequences to Bill, Charlie, and Tom Co.?

Reference no: EM132893858

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