Earl and Mary form Crow Corporation. Earl transfers property, basis of $200,000 and value of $1,600,000, for 50 shares in Crow Corporation. Mary transfers property, basis of $80,000 and value of $1,480,000, and agrees to serve as manager of Crow for one year; in return Mary receives 50 shares of Crow. The value of Mary's services is $120,000. With respect to the transfers:
a. Mary will not recognize gain or income.
b. Earl will recognize a gain of $1,400,000.
c. Crow will have a business deduction of $120,000 for the value of the services Mary will render.
d. Crow Corporation has a basis of $1,480,000 in the property it received from Mary.
e. None of these choices are correct.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Earl and Mary form Crow Corporation. Earl transfers property, basis of $200,000 and value of $1,600,000, for 50 shares in Crow Corporation. ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Bert sells his car to Conrad for $5,000 and his bike to Del for $600. Bert sells his vinyl collection to Elena for $1,000 and his stock in Altogether Now, Inc.-a firm that markets an app for organizing digital music files-to Franz for $4,000.
Answers (1)
Consider the following statement about real options: Decision tree analysis is more commonly used in valuing securities than real assets. True or False: The preceding statement is correct.
Answers (1)
During the current month, Reyes Corporation completed Job 310 and Job 312. Job 310 cost $62,890 and Job 312 cost $48,780. Job 312 was sold on account for $88,360. Journalize the entries for the completion of the two jobs and the sale of Job 312.
Answers (1)
A person who is skilled at performing calculations, had math skills for advanced analysis, and has organizational skills would best be suited to work as a.) a credit analyst b.) a sales manager c.) an advertising manager d.
Answers (1)
Pell grants are money given to students attending college. pell grants are most closely similar to a. property rights assigned to consumers of a good. b. public provision of a good. c. vouchers given to consumers of a good. d.
Answers (1)
New Questions in Business
Technical tool that provides users with the ability to study, control, and improve processes of all types is a:
Answers (1)
Johansen Corporation has a target capital structure of 60 percent common stock and 40 percent debt. Its cost of equity is 14 percent, and the cost of debt is 8 percent. The relevant tax rate is 30 percent. What is the company's WACC?
Answers (1)
On November 1, 2018, Aviation Training Corp. borrows $49,000 cash from Community Savings and Loan. Aviation Training signs a three-month, 6% note payable. Interest is payable at maturity. Aviation's year-end is December 31. Required: 1., 2. & 3.
Answers (1)
A stock's price is simply the current market price, and it is easily observed for publicly traded companies.
Answers (1)
Why is important to have a personal financial so important
Answers (1)