Individuals Adam and Bonnie form an S corporation,with Adam contributing cash of $100,000 for a 50% interest,and Bonnie contributing appreciated ordinary income property with an adjusted basis of $20,000 and a fair market value of $100,000.
a. Determune Bonne's intial basis in her stock, assuming that she receives a 50% interest.
b. The S corporation sells the property for $ 120,000. Determine Adam's and Bonnie's stock basis after the sale
c. Determine Adam's and Bonnie's gain or loss if the company is liquidated.

Question

Individuals Adam and Bonnie form an S corporation,with Adam contributing cash of $100,000 for a 50% interest,and Bonnie contributing appreciated ordinary income property with an adjusted basis of $20,000 and a fair market value of $100,000.
 a. Determune Bonne's intial basis in her stock, assuming that she receives a 50% interest.
b. The S corporation sells the property for $ 120,000. Determine Adam's and Bonnie's stock basis after the sale
c. Determine Adam's and Bonnie's gain or loss if the company is liquidated.

Quizplus · Accepted Answer

The Answer of Individuals Adam and Bonnie form an S corporation,with Adam contributing cash of $100,000 for a 50% interest,and Bonnie contributing appreciated ordinary income property with an adjusted basis of $20,000 and a fair market value of $100,000.
 a. Determune Bonne's intial basis in her stock, assuming that she receives a 50% interest.
b. The S corporation sells the property for $ 120,000. Determine Adam's and Bonnie's stock basis after the sale
c. Determine Adam's and Bonnie's gain or loss if the company is liquidated.

Individuals Adam and Bonnie Form an S Corporation,with Adam Contributing