[zi007ad]

Hey,i was solving the AICPA released questions and i wasn’t convinced by AICPA solution and they didn’t add a clarification for the solution, i suggest it will be $0 while they solved it $6,000

“”The sole shareholder of an S corporation contributed equipment with a fair market value of $20,000 and a basis of $6,000 subject to $12,000 liability. What amount is the gain, if any, that the shareholder must recognize?

A $0

B. $6,000

C. $8,000

D. $12,000″”

Thank you

*COLORADO*
REG: 58,41,74,74,74,74,77
BEC: 67,76*,79
FAR: 62,68,60,75
AUD: 76*,64,66,81
* Expired

[hjc]

Corporation assumes the liab. Since it is greater than the basis it is consider a boot (6000-12,000) = 6000 gain to the shareholder

[hjc]

Corporation assumes the liab. Since it is greater than the basis it is consider a boot (6000-12,000) = 6000 gain to the shareholder

[KiwiCPA]

Reg 82; FAR 75; AUD 91; BEC 11/9/13; result due - 11/22/13

[KiwiCPA]

Reg 82; FAR 75; AUD 91; BEC 11/9/13; result due - 11/22/13

[hjc]

It is your basis that cannot go below zero. The question is asking about recognize gain to the shareholder

NBV

<liab assummed>

=boot

That's how they arrive to 6000 gain

[hjc]

It is your basis that cannot go below zero. The question is asking about recognize gain to the shareholder

NBV

<liab assummed>

=boot

That's how they arrive to 6000 gain

[zi007ad]

Thank you All 🙂

*COLORADO*
REG: 58,41,74,74,74,74,77
BEC: 67,76*,79
FAR: 62,68,60,75
AUD: 76*,64,66,81
* Expired

[zi007ad]

Thank you All 🙂

*COLORADO*
REG: 58,41,74,74,74,74,77
BEC: 67,76*,79
FAR: 62,68,60,75
AUD: 76*,64,66,81
* Expired

[Whopper Warrior]

i think the real meat and potatoes of the question is the type of orginization. although an s corporation is a flow through like a partnership, s corp liabilities do not increase basis like a partnerhsip would, assuming recourse debt.

ALL 4 parts passed summer 13
Ethics October 13
Experience (waiting)

Becker Only

[Whopper Warrior]

i think the real meat and potatoes of the question is the type of orginization. although an s corporation is a flow through like a partnership, s corp liabilities do not increase basis like a partnerhsip would, assuming recourse debt.

ALL 4 parts passed summer 13
Ethics October 13
Experience (waiting)

Becker Only

[Author]

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