1) For the year 2012 Luda Corp (a cal year business) had the following transactions
Taxable income $4,200,000
Excess intangible drilling csts 575,200
Accelerated deprec on pre-1987 real property 1,500,500 (in excess of straight line deprec)
AMT NOL deduct 989,570
a) For the year 2012, complete the corporation's AMTI
b) Complete the tentative minimum tax
c) Complete the tentative minimum tax base
d) Is there an amount of the AMT? If so, what amount? Assume no ACE adj
2) Acknowledge the subsequent for person 1 and person 2 of a corporation-
Consideration Transferred- Person 1 (30 Shares)
Basis to Transferor FMV
Cash 50,000, 50,000
Installment Obligation (IO) 140,000, 250,000
Person 2 (70 shares)-
Basis to Transferor, FMV
Cash 150,000, 150,000
Equipment 125,000, 250,000
Patent 10,000, 300,000
The IO has a face amount of $250,000 as well as was acquired last year from the sale of land held for investment purposes (adj. Basis of 140,000)
a) Person 1's recognized gain or loss
b) Person 2's recognized gain or loss
c) The corporation's basis in the IO
d) Person 1's basis in the corporation's stock
e) Person 2's basis in the corporation's stock
f) The corporation's basis in the equipment and patent
g) Would your responses change if Person 1 received common stock and Person 2 received preferred stock?
h) Would your responses change if Person 2 was a partnership? How?
3) Chris transfers property -basis of 50,000 as well as FMV of 25,000- to Potter Corp. in exchange for shares of §1244 stock. Transfer under §351
a) Chris and Potter Corp. didn't make an election to reduce his stock basis. Provide the basis of the stock to Chris
b) Provide the basis of the stock to Chris for the purpose of §1244
c) If Chris sells the stock for 20000 two years after how would the loss be treated for the purpose of tax?
4) In a mid-western state Sweet Treats Corp. wants to set up a manufacturing facility Between Sweet Treats Corp as well as a town in Ohio, negotiations were made. Sweet Treats Corp accepts the land offer of FMV of 3,000,000 and cash of 1,000,000
a) Provide the basis Sweet Treats Corp. will have in the land
b) What amount of gain or income must the corporation recognize?
c) Within a year, Sweet Treats Corp. builds a building for 800,000 as well as buys inventory for 200,000. Give the basis of Sweet Treats Corp. in each of these assets