Problem 18-30 (LO. 1) Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (wo

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Problem 18 30 Lo 1 Dan Knight And Patricia Chen Who Are Good Friends Form Crane Corporation Dan Transfers Land Wo 1 (50.68 KiB) Viewed 62 times

Problem 18 30 Lo 1 Dan Knight And Patricia Chen Who Are Good Friends Form Crane Corporation Dan Transfers Land Wo 2 (23.51 KiB) Viewed 62 times

Problem 18 30 Lo 1 Dan Knight And Patricia Chen Who Are Good Friends Form Crane Corporation Dan Transfers Land Wo 3 (55.99 KiB) Viewed 62 times

Problem 18 30 Lo 1 Dan Knight And Patricia Chen Who Are Good Friends Form Crane Corporation Dan Transfers Land Wo 4 (67.88 KiB) Viewed 62 times

Problem 18-30 (LO. 1) Dan Knight and Patricia Chen, who are good friends, form Crane Corporation. Dan transfers land (worth $200,000, basis of $60,000) for 50% of the stock in Crane. Patricia transfers machinery (worth $150,000, adjusted basis of $30,000) and provides services worth $50,000 for 50% of the stock. a. Will the transfers qualify under $ 351? Yes ✓, because all of Patricia's stock is counted in determining control since the property she transferred has than a nominal value in comparison to the value of the services rendered. more Feedback Check My Work Nonrecognition treatment for the property transferors may be lost if "too much" stock is transferred to persons who did not contribute property. b. What are the tax consequences to Dan and Patricia? Dan recognizes no gain or loss on the transfer of the land. His basis in the Crane stock is $ 60,000. Patricia recognizes compensation income of $ 50,000 on the transfer. Patricia has a basis of $ 200,000 X in her Crane stock. Feedback Check My Work Partially correct
c. What is Crane Corporation's basis in the land and the machinery? Crane Corporation has a basis of $ 60,000 in the land and a basis of s 150,000 in the machinery. In addition, Crane either has a deduction of $ 150,000 for the services provided by Patricia, or it will capitalize the 60,000 as organizational costs d. Enter the results of this transaction to Patricia on her Form 1040. Assume Patricia is single, has no other income, and claims a standard deduction of $12,000. Enter all amounts as positive numbers.
Form Department of the Treasury-Internal Revenue Service (99) 1040 U.S. Individual Income Tax Return 2018 OMB No. 1545-0074 IRS Use Only Filing status: Single Your first name and initial Last name Your social security number 123-45-6789 Patricia Chen Your standard deduction: None If joint return, spouse's first name and initial Last name Spouse's social security number Spouse standard deduction: None Full-year health care coverage or exempt (see inst.) Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign (see inst.) You – Spouse If more than four dependents, see inst. and here City, town or post office, state, and ZIP code. If you have a foreign address, attach Schedule 6. a Dependents (see instructions): (2) Social security number (3) Relationship to you (4) Vif qualifies for (see inst.): (1) First name Last name Child tax credit Credit for other dependents Sign Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and
1 Wages, salaries, tips, etc. Attach Form(s) W-2.. 1 2a Tax-exempt interest 2a b Taxable interest 2b 3a Qualified dividends 3a b Ordinary dividends 3b 4a IRAs, pensions, and annuities 4a b Taxable amount Attach Form(s) W- 2. Also attach Form(s) W-2G and 1099-R if tax was withheld. 4b 5a Social security benefits 5a b Taxable amount 5b 6 Total income. Add lines 1 through 5. Add any amount from Schedule 1, line 22 6 50,000 7 Adjusted gross income. If you have no adjustments to income, enter the amount from line 6; otherwise, subtract Schedule 1, line 36, from line 6 7 8 8 Standard deduction or itemized deductions (from Schedule A) 8 9 Qualified business income deduction (see instructions).. 9 10 Taxable income. Subtract lines 8 and 9 from line 7. If zero or less, enter -0-.... 10 11 Standard Deduction for- • Single or married filing separately, $12,000 • Married filing jointly or Qualifying widow(er), $24,000 • Head of household, $18,000 • If you checked any box under Standard a Tax (see inst) (check if any from: 1 Form(s) 8814 2 0 Form 4972 30 b Add any amount from Schedule 2 and check here 11 12 a Child tax credit/credit for other dependents b Add any amount from Schedule 3 and check here 12 13 Subtract line 12 from line 11. If zero or less, enter -- 13 14 Other taxes. Attach Schedule 4 14 15 Total tax. Add lines 13 and 14 15