Business, 07.03.2020 04:29 csorensen

Kim contributes land (basis of $190,000; fair market value of $250,000) to a business entity in exchange for 100% of the stock. During the first year of operation, the entity earns a profit of $75,000. At the end of the first year, the entity has outstanding liabilities of $30,000 ($20,000 recourse and $10,000 nonrecourse). Select from the following:
a. If the entity is a C corporation, Kim's basis for her stock at the end of the first year is $265,000 ($190,000+ $75,000) and her at-risk basis is $265,000.
b. If the entity is a partnership, Kim's basis for her partnership interest (outside basis) at the end of the first year is $355,000 ($250,000+ $75,000+ $30,000) and her at- risk basis is $345,000 ($250,000+ $75,000 + $20,000).
c. If the entity is an Scorporation, Kim's basis for her stock at the end of the first year is $345,000 ($250,000+ $75,000 + $20,000) and her at-risk basis is $345,000.
d. Only a. and c. are correct.
e. Choice a., b., and c. are incorrect.

Answers: 1

Show answers

Another question on Business

Business, 22.06.2019 01:00

Granby foods' (gf) balance sheet shows a total of $25 million long-term debt with a coupon rate of 8.50%. the yield to maturity on this debt is 8.00%, and the debt has a total current market value of $27 million. the company has 10 million shares of stock, and the stock has a book value per share of $5.00. the current stock price is $20.00 per share, and stockholders' required rate of return, r s, is 12.25%. the company recently decided that its target capital structure should have 35% debt, with the balance being common equity. the tax rate is 40%. calculate waccs based on book, market, and target capital structures. what is the sum of these three waccs?

Answers: 3

Answer

Business, 22.06.2019 10:00

Cynthia is a hospitality worker in the lodging industry who prefers to cater to small groups of people. she might want to open a

Answers: 3

Answer

Business, 22.06.2019 11:40

On coral island in 2012, the labor force is 12,000, the unemployment rate is 10 percent, and the labor force participation rate is 60 percent. during 2013, 200 unemployed people found jobs and the working-age population increased by 1,000. the total number of people in the labor force did not change. the working-age population at the end of 2013 was the unemployment rate at the end of 2013 was round up to the second decimal. the labor force participation rate at the end of 2013 was round up to the second decimal.

Answers: 1

Answer

Business, 22.06.2019 12:50

Salaries are $4,500 per week for five working days and are paid weekly at the end of the day fridays. the end of the month falls on a thursday. the accountant for dayton company made the appropriate accrual adjustment and posted it to the ledger. the balance of salaries payable, as shown on the adjusted trial balance, will be a (assume that there was no beginning balance in the salaries payable account.)

Answers: 1

Answer

You know the right answer?

Kim contributes land (basis of $190,000; fair market value of $250,000) to a business entity in exch...

Questions