Sole shareholder stock basis

Technical topics regarding tax preparation.
#1
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79
Joined:
21-Apr-2014 3:11pm
Location:
South Dakota
Taxpayer incorporates his business via Sec. 351(a) as follows:


Assets : $500

Liabilities: $300

Common Stock: $200

Over the year's sole stockholder loans corporation $50. Stockholder converts loan to equity.


Assets : $700

Liabilities: $100

Common Stock: $200

Paid in Capital Surplus: $50

Retained Earnings: $350

Stockholder sells stock to unrelated person for $400.

Just want to confirm stock basis for determining the gain on the sale is $250.

Thank you.
 

#2
Nilodop  
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21-Apr-2014 9:28am
Location:
Pennsylvania
Consider it confirmed, provided it's. C corp and provided the original Assets : $500
is basis, not FMV.
 

#3
JR1  
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Western 'burbs of Chicago
Disagree. 250 plus the AAA/Ret Earnings of 350 that he paid tax on.
Go Blackhawks! Go Pack Go!
Remembering our son, Ben Jan 22, 1992 to Aug 26, 2011.
For FB'ers: https://www.facebook.com/groups/BenRoberts/
 

#4
sjrcpa  
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Maryland
Who said it was an S Corp?
 

#5
JR1  
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6043
Joined:
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Location:
Western 'burbs of Chicago
Great point. S is default in my head. I'm down to 2 C's remaining...shortly only 1.
Go Blackhawks! Go Pack Go!
Remembering our son, Ben Jan 22, 1992 to Aug 26, 2011.
For FB'ers: https://www.facebook.com/groups/BenRoberts/
 


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