Gain or income recognizing the exchanges

Reference no: EM13122646

Sara and Jane form Wren Corporation. Sara transfers property, basis of $25,000 and value of $200,000, for 50 shares in Wren corporation. Jane transfers property, basis of $10,000 and value of $185,000, and agrees to serve as manager of Wren for one year; in return, Jane receives 50 shares in Wren. The value of Jane's services to Wren is $15,000 .

a) What gain or income do Sara and Jane recognize on the exchanges?

b) What is Wren corporation's basis in the property transferred by Sara and Jane? How does wren treat the value of the services Jane renders?

Reference no: EM13122646

Questions Cloud

Consolidated financial statements of a us parent : Are you familiar with any foreign income tax planning strategies that are utilized by some multinational corporations? Do you know of any of the intricacies of how foreign income taxes impact the consolidated financial statements of a US parent?

Determine the impedances of elements in laplace domain : Redraw the schematics with the impedance of each of the element shown in Laplace domain. Then determine the overall impedance of the entire circuit between the two ends of the shown circuit and express it in Laplace domain as a ratio of two polyno..

Plot graph of equations : Plot the graph of the equations 4x - 6y = 12 and x - 5y = 10 and interpret the result. Plot the graph of the equations 8x - 4y = 12 and -4x + 2y = -6 and interpret the result.

Compute the break-even point in dollars and in units : In August, Gold Company sold 770 units of their only product. For the month, fixed costs were $10,400, variable costs were 57% of sales, and the average sales price was $62.

Gain or income recognizing the exchanges : What gain or income do Sara and Jane recognize on the exchanges? What is Wren corporation's basis in the property transferred by Sara and Jane? How does wren treat the value of the services Jane renders?

Equation of the trend line : Write the equation of the trend line. Do the scores support an increasing or a decreasing trend?

Calculate the standard deviation data : Calculate the Standard Deviation of your data, Your ability to describe a normal distribution as evidenced by a bell shaped curve. Your ability to describe the information provided by the Standard Deviation.

Plot graphs of following functions : Refer to the graph given below and identify the graph that represents the corresponding function. Justify your answer.

Is the related lease finance or operating lease : Identify some benefits that might accrue to Lion Nathan as a result of the sale and lease back transaction?

User Account

All Pages