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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...

Suzy contributed business related assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in the Suz Anna Partnership. Anna contributed land and a building valued at $640,000 (basis of $380,000) in exchange for the remaining 60% interest. Anna’s...

Bryan and Cody each contributed $120,000 to the newly formed BC Partnership in exchange for a 50% interest. The partnership used the available funds to acquire equipment costing $200,000 and to fund current operating expenses. The partnership agreement provides that...

Michael transfers the following assets to Peach Corporation in exchange for all of its stock. (Assume that neither Michael nor Peach plans to make any special tax elections at the time of incorporation.) Assets Michael’sAdjusted Basis Fair MarketValue Inventory $...

Tim is a real estate broker who specializes in commercial real estate. Although he usually buys and sells on behalf of others, he also maintains a portfolio of property of his own. He holds this property, mainly unimproved land, either as an investment or for sale to...

Sarah is the sole owner of Bluegrass Corporation. The basis and value of her stock investment in Bluegrass are approximately $100,000. In addition, she manages Bluegrass’s operations on a full time basis and pays herself an annual salary of $40,000. Because of a...

Green Corporation has several employees. Their names and salaries are listed below. Samantha $600,000 Chris (Samantha’s daughter) 100,000 Joey (Samantha’s son) 100,000 Jack (an unrelated third party) 250,000 Chris and Joey are the only shareholders of Green...

Jane, Jon, and Clyde incorporate their respective businesses and form Starling Corporation. On March 1 of the current year, Jane exchanges her property (basis of $50,000 and value of $150,000) for 150 shares in Starling Corporation. On April 15, Jon exchanges his...