What is the corporations basis in the building

Assignment Help Financial Accounting

Reference no: EM131286325

Sandra owned a rental apartment building in her sole name for four years. After her business advisors suggested that she conduct her rental activity in corporate form, she promptly transferred the apartment building to ABC Rental Corporation, a newly formed corporation. Sandra received all of the stock of ABC Rental Corporation in exchange for the apartment building. At the time of the transfer of the apartment building to ABC Rental Corporation, Sandra’s adjusted basis in the building was $50,000, the fair market value of the building was $150,000, the building was subject to a mortgage of $70,000 which ABC Rental Corporation assumed, and there was depreciation recapture potential of $12,000. Sandra received stock of ABC Rental Corporation worth $80,000. As a result of the transaction, what is the corporation’s basis in the building? A. $50,000. B. $70,000. C. $150,000. D. $170,000.

Reference no: EM131286325

Questions Cloud

Distributed to an individual shareholder land : ABC Inc. had current earnings and profits of $50,000 when it distributed to an individual shareholder land that the corporation held as an investment. There were no other transactions that might affect ABC Inc.’s earnings and profits for the year. Wh..

What specific roles do these think tanks have : What specific roles do these think tanks have, which policy actors (interest groups, sub governments, branches of government) seem to be driving this specific tank?

Tax consequences of the transaction is accurate : Larry formed Sleuth Corporation in order to incorporate the detective agency business that he had been operating for several years as a sole proprietorship. In exchange for the assets transferred, Larry received 100 percent of the stock of the corpor..

What are the salient characteristics of each : From your readings and experience, discuss the basic differences between the acquisition of capital equipment and business services. What are the salient characteristics of each?

What is the corporations basis in the building : Sandra owned a rental apartment building in her sole name for four years. After her business advisors suggested that she conduct her rental activity in corporate form, she promptly transferred the apartment building to ABC Rental Corporation, a newly..

Discuss any four reasons for grouping pupils : Discuss any four reasons for grouping pupils in a teaching and learning situation

Increase in the competitors advertising expenditures : One of the leading TV producers has estimated the following demand equation after analyzing 32 regional markets: What would be the effect of a 6 unit increase in the competitor’s advertising expenditures? What would be the change in your advertising ..

Show the productivity change for each category : Show the productivity change for each category and then determine the IMPROVEMENT for labour- hrs, the typical standard for comparison.

Prepare the entries for lessee and lessor for lease term : On January 1, 2013, Zillo Co. leased office space by signing a 3-year operating lease with Geka Co. Zillo made a down payment of $9,000 on that date. Zillo additionally made a payment of $5,000 on Jan. 1 of 2013, 2014, and 2015. Prepare the entries f..

User Account

All Pages