REG Study Group October November 2013 - Page 168

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  • October 24, 2013 at 11:48 pm #481748
    Anonymous
    Inactive

    @Future

    I believe the answer is C

    The corporation normally takes as Tax basis the adjusted basis of the property received from the at least 80% group of shareholders after the transaction. However, the corporation also paid additional boot, which will increase the tax basis of the asset.

    October 25, 2013 at 12:17 am #481734
    Future_FLCPA
    Member

    C is correct.

    X Corp's basis in the land is B's basis plus any gain recognized by B. B's recognized gain is the lower of 1) the realized gain or 2) the boot received. The realized gain is 30,000 & the boot is 20,000. Therefore the basis is the 40,000 plus 20,000.

    Anyone know what B's basis in the Corp is?

    B - 80 (Aug 2012)
    A - 89 (Jan 2013)
    F - 77 (May 2013)
    R - 83 (Nov 2013)

    October 25, 2013 at 12:17 am #481750
    Future_FLCPA
    Member

    C is correct.

    X Corp's basis in the land is B's basis plus any gain recognized by B. B's recognized gain is the lower of 1) the realized gain or 2) the boot received. The realized gain is 30,000 & the boot is 20,000. Therefore the basis is the 40,000 plus 20,000.

    Anyone know what B's basis in the Corp is?

    B - 80 (Aug 2012)
    A - 89 (Jan 2013)
    F - 77 (May 2013)
    R - 83 (Nov 2013)

    October 25, 2013 at 12:21 am #481736
    Future_FLCPA
    Member

    CPAExcel says “B's amount realized is computed as follows: The corporation received cash of $50,000 and land of $70,000 for a total of $120,000. But it also gave $20,000 cash back to B as part of the formation. This is subtracted from above – – so the net value of what the corporation received is $100,000. $100,000 x 50% = $50,000, so that is the value of the stock received by B. His amount realized is $50,000 + cash received of $20,000 = $70,000.”

    I'm just a little confused at this explanation.

    B - 80 (Aug 2012)
    A - 89 (Jan 2013)
    F - 77 (May 2013)
    R - 83 (Nov 2013)

    October 25, 2013 at 12:21 am #481752
    Future_FLCPA
    Member

    CPAExcel says “B's amount realized is computed as follows: The corporation received cash of $50,000 and land of $70,000 for a total of $120,000. But it also gave $20,000 cash back to B as part of the formation. This is subtracted from above – – so the net value of what the corporation received is $100,000. $100,000 x 50% = $50,000, so that is the value of the stock received by B. His amount realized is $50,000 + cash received of $20,000 = $70,000.”

    I'm just a little confused at this explanation.

    B - 80 (Aug 2012)
    A - 89 (Jan 2013)
    F - 77 (May 2013)
    R - 83 (Nov 2013)

    October 25, 2013 at 12:21 am #481738
    smsingla
    Member

    I think answer should be A.

    Shareholder basis of stock = Basis of property transferred + gain recognized – boot received.

    Shareholder basis of stock = 40,000 + 20,000- 20,000

    REG 81
    BEC 74,65,78
    FAR 79
    AUD 85 DONE!!!

    October 25, 2013 at 12:21 am #481754
    smsingla
    Member

    I think answer should be A.

    Shareholder basis of stock = Basis of property transferred + gain recognized – boot received.

    Shareholder basis of stock = 40,000 + 20,000- 20,000

    REG 81
    BEC 74,65,78
    FAR 79
    AUD 85 DONE!!!

    October 25, 2013 at 12:12 pm #481740
    Future_FLCPA
    Member

    T-minus one week till my exam! I took this Friday off so that I can focus on weak areas.

    B - 80 (Aug 2012)
    A - 89 (Jan 2013)
    F - 77 (May 2013)
    R - 83 (Nov 2013)

    October 25, 2013 at 12:12 pm #481756
    Future_FLCPA
    Member

    T-minus one week till my exam! I took this Friday off so that I can focus on weak areas.

    B - 80 (Aug 2012)
    A - 89 (Jan 2013)
    F - 77 (May 2013)
    R - 83 (Nov 2013)

    October 25, 2013 at 4:56 pm #481742
    Anonymous
    Inactive

    @Future_FLCPA do you live in Florida?

    October 25, 2013 at 4:56 pm #481758
    Anonymous
    Inactive

    @Future_FLCPA do you live in Florida?

    October 25, 2013 at 5:05 pm #481744
    Anonymous
    Inactive

    Hi all! I take reg tomorrow and for the last week I've had my 80 year old grandfather here visiting me so I've been picking up my book and putting it down constantly. Are there any certain topics I should make sure to cram tonight? Basis is my weakness so I'll be looking over those calculations today.

    October 25, 2013 at 5:05 pm #481760
    Anonymous
    Inactive

    Hi all! I take reg tomorrow and for the last week I've had my 80 year old grandfather here visiting me so I've been picking up my book and putting it down constantly. Are there any certain topics I should make sure to cram tonight? Basis is my weakness so I'll be looking over those calculations today.

    October 25, 2013 at 5:16 pm #481746
    Future_FLCPA
    Member

    @amelia – I do!

    B - 80 (Aug 2012)
    A - 89 (Jan 2013)
    F - 77 (May 2013)
    R - 83 (Nov 2013)

    October 25, 2013 at 5:16 pm #481762
    Future_FLCPA
    Member

    @amelia – I do!

    B - 80 (Aug 2012)
    A - 89 (Jan 2013)
    F - 77 (May 2013)
    R - 83 (Nov 2013)

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