Questions from Federal Taxation

Q: Emily Patrick (36 Paradise Road, Northampton, MA 01060)

Emily Patrick (36 Paradise Road, Northampton, MA 01060) formed Teal Corporation a number of years ago with an investment of $200,000 cash, for which she received $20,000 in stock and $180,000 in bonds...

Q: Stock in Jaybird Corporation (555 Industry Lane, Pueblo, CO

Stock in Jaybird Corporation (555 Industry Lane, Pueblo, CO 81001) is held equally by Vera, Wade, and Wes. Jaybird seeks additional capital in the amount of $900,000 to construct a building. Vera, Wad...

Q: Sam Upchurch, a single taxpayer, acquired stock in Hummer Corporation

Sam Upchurch, a single taxpayer, acquired stock in Hummer Corporation that qualified as a small business corporation under § 1244 at a cost of $100,000 three years ago. He sells the stock for $10,000...

Q: Three years ago and at a cost of $40,000

Three years ago and at a cost of $40,000, Paul Sanders acquired stock in a corporation that qualified as a small business corporation under § 1244. A few months after he acquired the stock, when it wa...

Q: Gigi transfers real estate (basis of $60,000 and

Gigi transfers real estate (basis of $60,000 and fair market value of $40,000) to Monarch Corporation in exchange for shares of § 1244 stock. (Assume that the transfer qualifies under § 351.) a. What...

Q: Ira Cook is planning to make a charitable contribution to the Boy

Ira Cook is planning to make a charitable contribution to the Boy Scouts of Crystal, Inc. stock worth $20,000. The stock has an adjusted basis of $15,000. A friend has suggested that Ira sell the stoc...

Q: Frank, Cora, and Mitch are equal shareholders in Purple Corporation

Frank, Cora, and Mitch are equal shareholders in Purple Corporation. The corporation’s assets have a tax basis of $50,000 and a fair market value of $600,000. In the current year, Frank and Cora each...

Q: Seth, Pete, Cara, and Jen form Kingfisher Corporation with

Seth, Pete, Cara, and Jen form Kingfisher Corporation with the following consideration: Assume that the value of each share of Kingfisher stock is $3,000. As to these transactions, provide the follo...

Q: On June 1, 2013, Skylark Enterprises (not a corporation

On June 1, 2013, Skylark Enterprises (not a corporation) acquired a retail store building for $500,000 (with $100,000 being allocated to the land). The store building was 39-year real property, and th...

Q: Tom and Gail form Owl Corporation with the following consideration:

Tom and Gail form Owl Corporation with the following consideration: The installment note has a face amount of $350,000 and was acquired last year from the sale of land held for investment purposes (...