what are the tax consequences for Ling? and what tax consequences to the corporation?
Posted on February 2, 2009 by admin
C asked:
My friend and Ling form a Corporatin. My friend transfers cash of $ 1000,000 and equipment( basis of $ 300,000 and FMV of $ 400,000) for 50 % of a corporation’s stock. Ling transfers land and builing ( basis of $ 510,000 and FMV of $ 450,000) and agrees to manage the business for one year for the other 50% of a corporation’s stock. The value of Ling’s service for one year is $ 50,000.
My friend and Ling form a Corporatin. My friend transfers cash of $ 1000,000 and equipment( basis of $ 300,000 and FMV of $ 400,000) for 50 % of a corporation’s stock. Ling transfers land and builing ( basis of $ 510,000 and FMV of $ 450,000) and agrees to manage the business for one year for the other 50% of a corporation’s stock. The value of Ling’s service for one year is $ 50,000.
This has all the earmarks of a school problem. If you’d care to post your answer, we’ll be happy to review it and comment. Most of us refrain from doing the work for you as that doesn’t help you learn.