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At the time of its liquidation under § 332, Cardinal Corporation (E & P of $560,000) had the following assets and liabilities: cash ($175,000); marketable securities (fair market value of $230,000, basis of $250,000); unimproved land (fair market value of...

Jed acquired 25% of the stock of Alpha Corporation (basis of $100,000) 12 years ago, and the other 75% was purchased by Zia (basis of $510,000) three years ago. Jed also holds a 10 year, $150,000 Alpha bond paying 6% interest. Alpha enters into a tax free...

Target Corporation holds assets with a fair market value of $4 million (adjusted basis of $2.2 million) and liabilities of $1.5 million. It transfers assets worth $3.7 million to Acquiring Corporation in a “Type C” reorganization, in exchange for Acquiring voting...

Liz and John formed the equal LJ Partnership on January 1 of the current year. Liz contributed $80,000 of cash and land with a fair market value of $90,000 and an adjusted basis of $75,000. John contributed equipment with a fair market value of $170,000 and an...

The JM Partnership was formed to acquire land and subdivide it as residential housing lots. On March 1, 2012, Jessica contributed land valued at $600,000 to the partnership, in exchange for a 50% interest in JM. She had purchased the land in 2004 for $420,000 and held...

Finch, Inc., a calendar year general contractor, and Cardinal, Inc., a development corporation with a July 31 year end, formed the equal FC, LLC, on January 1 of the current year. Both LLC members are C corporations. The LLC was formed to construct and lease shopping...

On July 1 of the current year, the R & R Partnership (an LLLP) was formed to operate a bed and breakfast inn. The partnership paid $3,000 in legal fees for drafting the partnership agreement and $5,000 for accounting fees related to organizing the entity. It also...

Phoebe and Parker are equal members in Phoenix Investors, LLC. They are real estate investors who formed the LLC several years ago with equal cash contributions. Phoenix then purchased a piece of land. On January 1 of the current year, to acquire a one third interest...

The KL Partnership is owned equally by Kayla and Lisa. Kayla’s basis is $20,000 at the beginning of the tax year. Lisa’s basis is $16,000 at the beginning of the year. KL reported the following income and expenses for the current tax year: Sales revenue $150,000 Cost...