Reference no: EM13133637
1. JBC Corporation is owned 20 percent by John, 30 percent by Brian, 30 percent by Charlie, and 20 percent by Z Corporation. Z Corporation is owned 80 percent by John and 20 percent by an unrelated party. Brian and Charlie are brothers. Answer each of the following questions about JBC under the constructive ownership rules of Section 267:
a. What is John's percentage ownership?
b. What is Brian's percentage ownership?
2. Martin sells a stock investment for $25,000 on August 2, 2010. Martin's adjusted basis in the stock is $14,000.
a. If Martin acquired the stock on November 15, 2008, calculate the amount and the nature of the gain or loss.
b. If Martin had acquired the stock on September 11, 2007, calculate the amount and nature of the gain or loss.
3. . William sold Section 1245 property for $25,000 in 2010. The property cost $35,000 when it was purchased 5 years ago. The depreciation claimed on the property was $16,000.
a. Calculate the adjusted basis of the property.
b. Calculate the recomputed basis of the property.
c. Calculate the amount of ordinary income under Section 1245.
d. Calculate the Section 1231 gain.