Sam, Paul, Carlos and Jai form Pinochle Corporation by contributing the following assets to Pinochle: # of Shares Other Prop. Rec' by S/H Basis to Fair Market Transferor Value Issued Sam contributes: Inventory $30,000 $96,000 30 $6,000 Cash Paul contributes: $45,000 Paul had taken $30,000 of depreciation in prior years Equipment $99,000 30 $9,000 Cash Carlos Secret Formula $15,000 $90,000 30 Jai Cash $30,000 $30,000 10 a. What is Sam's recognized gain related to this transaction? b. What is Seth's basis in his Pinochle stock? c. What is Pinochle's basis in the inventory? d. What Is Paul's recognized gain or loss? e. Is Paul's' gain or loss capital or ordinary? f. What is Paul's basis in his Pinochle stock? g. What is Pinochle's basis in the equipment? h. What is Carlos' recognized gain on the transaction? i. What is Pinochle's basis in the secret formula? j. What is Jai's recognized gain or loss? k. What is Jai's basis in his Pinochle stock?

Sam, Paul, Carlos and Jai form Pinochle Corporation by contributing the following assets to Pinochle: # of Shares Other Prop. Rec' by S/H Basis to Fair Market Transferor Value Issued Sam contributes: Inventory $30,000 $96,000 30 $6,000 Cash Paul contributes: $45,000 Paul had taken $30,000 of depreciation in prior years Equipment $99,000 30 $9,000 Cash Carlos Secret Formula $15,000 $90,000 30 Jai Cash $30,000 $30,000 10 a. What is Sam's recognized gain related to this transaction? b. What is Seth's basis in his Pinochle stock? c. What is Pinochle's basis in the inventory? d. What Is Paul's recognized gain or loss? e. Is Paul's' gain or loss capital or ordinary? f. What is Paul's basis in his Pinochle stock? g. What is Pinochle's basis in the equipment? h. What is Carlos' recognized gain on the transaction? i. What is Pinochle's basis in the secret formula? j. What is Jai's recognized gain or loss? k. What is Jai's basis in his Pinochle stock?

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter20: Corporations And Partnerships

Section: Chapter Questions

Problem 47P

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