Loonis Inc. and Rhea Company formed LooNR Inc. by transferring business assets in exchange for 1,000 shares of LooNR common stock. Loonis transferred assets with a $820,000 FMV and a $444,000 adjusted tax basis and received 820 shares. Rhea transferred assets with a $180,000 FMV and a $75,000 adjusted tax basis and received 180 shares. Which of the following statements is true?
A) The FMV of Rhea's 180 shares is $180,000.
B) Rhea's exchange of assets for stock is taxable because Rhea is not in control of LooNR immediately after the exchange.
C) LooNR recognizes a $105,000 gain on the exchange of its stock for Rhea's assets.
D) None of these choices are true.
Correct Answer:
Verified
Q92: On January 21, 2009, Andy purchased 350
Q93: Loonis Inc. and Rhea Company formed LooNR
Q94: Three individuals transferred property to newly formed
Q95: IPM Inc. and Zeta Company formed IPeta
Q96: IPM Inc. and Zeta Company formed IPeta
Q97: IPM Inc. and Zeta Company formed IPeta
Q99: Ms. Ellis sold 889 shares of publicly
Q100: Which of the following statements about the
Q101: Texark Inc., a calendar year taxpayer, reported
Q102: Mr. and Mrs. Meredith own a sole
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents