tthompson7186
19.02.2021 •
Business
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Inc. (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet:
FMV Adjusted Basis Appreciation
Cash$200,000 $200,000
Building 50,000 10,000 40,000
Land 150,000 90,000 60,000
Total$400,000 $300,000 $100,000
Under the terms of the agreement, Shauna will receive the $200,000 cash in exchange for her 50 percent interest in WFI. Shauna's tax basis in her WFI stock is $50,000. Danielle will receive the building and land in exchange for her 50 percent interest in WFI. Danielle's tax basis in her WFI stock is $100,000. Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation on gain recognized as a result of the liquidation. (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.)
10.
value:
1.00 points
Required information
a. What amount of gain or loss does WFI recognize in the complete liquidation?
References
eBook & Resources
ProblemDifficulty: 2 MediumLearning Objective: 19-05 Calculate the tax consequences that apply to the parties to a complete liquidation of a corporation.
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11.
value:
1.00 points
Required information
b. What amount of gain or loss does Shauna recognize in the complete liquidation?
References
eBook & Resources
ProblemDifficulty: 2 MediumLearning Objective: 19-05 Calculate the tax consequences that apply to the parties to a complete liquidation of a corporation.
Check my work
12.
value:
1.00 points
Required information
c. What amount of gain or loss does Danielle recognize in the complete liquidation?
References
eBook & Resources
ProblemDifficulty: 2 MediumLearning Objective: 19-05 Calculate the tax consequences that apply to the parties to a complete liquidation of a corporation.
Check my work
13.
value:
1.00 points
Required information
d. What is Danielle’s tax basis in the building and land after the complete liquidation?
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Ответ:
1. Based on the information given WFI transaction is a taxable transaction which include a recognizes gain of the amount of $40,000 on the transfer of the building as.well as gain of the amount of $60,000 on the transfer of the land.
2. Shauna will recognizes gain of the amountc of $150,000 on the transfer of her stock made to WFI calculated as ($200,000 - $50,000) .
Explanation:
1. Based on the information given WFI transaction is a taxable transaction which include a recognizes gain of the amount of $40,000 on the transfer of the building as.well as gain of the amount of $60,000 on the transfer of the land.
2. Shauna will recognizes gain of the amount of $150,000 on the transfer of her stock made to WFI calculated as ($200,000 - $50,000) .
Ответ:
False
Explanation:
The professor is giving her rights by giving her a chance to explain herself.