Essay on Federal Taxation Week 1 Quiz

834 Words Mar 23rd, 2014 4 Pages
. (TCO 2) Barry owns a 30% interest in a partnership that earned $300,000 this year. He also owns 30% of the stock in a C corporation that earned $300,000 during the year. The partnership did not make any distributions, and the corporation did not pay any dividends. How much income must Barry report from these businesses? (Points : 2) | $0 income from the partnership and $0 income from the corporation $0 income from the partnership and $90,000 income from the corporation $90,000 income from the partnership and $0 income from the corporation $90,000 income from the partnership and $90,000 income from the corporation None of the above | Question 2. 2. (TCO 2) Lilac Corporation, a closely held …show more content…
He transfers the following items to the newly created Wren Corporation. | Adjusted | Fair Market | | Basis | Value | Cash | $ 20,000 | $ 20,000 | Building | 110,000 | 160,000 | Mortgage payable (secured by the building and held for 15 years) | 135,000 | 135,000 |

With respect to this transaction, (Points : 2) | Wren Corporation's basis in the building is $110,000. Tim has no recognized gain. Tim has a recognized gain of $25,000. Tim has a recognized gain of $5,000. None of the above | Question 6. 6. (TCO 1) Hunter and Warren form Tan Corporation. Hunter transfers equipment (basis of $210,000 and fair market value of $180,000), whereas Warren transfers land (basis of $15,000 and fair market value of $150,000) and $30,000 of cash. Each receives 50% of Tan’s stock. As a result of these transfers, (Points : 2) | Hunter has a recognized loss of $30,000; Warren has a recognized gain of $135,000. neither Hunter nor Warren has any recognized gain or loss. Hunter has no recognized loss; Warren has a recognized gain of $30,000. Tan Corporation has a basis in the land of $45,000. None of the above | Question 7. 7. (TCO 1) Kirby and Helen form Red Corporation. Kirby transfers property, basis of $20,000 and value of $300,000, for 100 shares in Red Corporation. Helen transfers property, basis of

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