Technical topics regarding tax preparation.
29-Nov-2019 7:24pm
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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.
29-Nov-2019 8:11pm
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Consider it confirmed, provided it's. C corp and provided the original Assets : $500
is basis, not FMV.
2-Dec-2019 3:55pm
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Disagree. 250 plus the AAA/Ret Earnings of 350 that he paid tax on.
2-Dec-2019 3:59pm
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Who said it was an S Corp?
2-Dec-2019 5:06pm
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Great point. S is default in my head. I'm down to 2 C's remaining...shortly only 1.
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