(SOLVED) Young Corporation purchased residential real

estate several year ago for

Young Corporation purchased residential real estate several year ago for $225,000, of which
$25,000 was allocated to the land and $200,000 was allocated to the building. Young took
straight-line MACRS deductions of $30,000 during the years it held the property. In the current
year, Young sells the property for $285,000, […]

You are the CPA who prepares the tax returns for Don, his wife, Mary, and their two
corporations. Don owns 100% of Pencil Corporation’s stock. Pencil’s current year taxable
income is $100,000. Mary owns 100% of Eraser Corporation’s stock. Eraser’s current year
taxable income is $150,000. Don and Mary file […]

What special restrictions apply to the deduction of a loss realized on the sale of property
between a corporation and a shareholder who owns 60% of the corporation’s stock? What
restrictions apply to the deduction of expenses accrued by a corporation at year-end and owed
to a cash method shareholder […]

John plans to transfer the assets and liabilities of his business to Newco in exchange for all of
Newco’s stock. The assets have a $250,000 basis and an $800,000 FMV. John also plans to
transfer $475,000 of business related liabilities to Newco. Under Sec. 357(c), can John avoid
recognizing a […]

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Your clients, Lisa and Matthew, are planning to form Lima Corporation. Lisa will contribute
$50,000 cash to Lima for 50 shares of its stock. Matthew will contribute land having a $35,000
adjusted basis and a $50,000 FMV for 50 shares of Lima stock. Lima will borrow additional
capital from a […]

In an exchange qualifying for Sec. 351 tax-free treatment, Greta receives 100 shares of White
Corporation stock plus a right to receive another 25 shares. The right is contingent on the
valuation of a patent contributed by Greta. Because the patent license is pending, the patent
cannot be valued for […]

Bob and Carl transfer property to Stone Corporation for 90% and 10% of Stone stock,
respectively. Pursuant to a binding agreement concluded before the transfer, Bob sells half of
his stock to Carl. Prepare a memorandum for your tax manager explaining why the exchange
does or does not meet the […]

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