S-Corporation Taxation: Two shareholders, cash and services
Not what you're looking for?
What happens if two individuals form a S-Corporation? One person contributes $100,000 for 50% ownership, and the other person contributes services for a 50% interest. What are the tax consequences of this transaction?
Purchase this Solution
Solution Summary
This solution discusses the tax consequences incurred when two individuals form an S-Corporation.
Solution Preview
There are two important concepts in dealing with this issue:
1. The contribution of services in exchange for stock is a taxable event to the contributing shareholder. If we assume that the fair market value of the services is $100,000, then the transaction is fairly straight-forward. The contributing shareholder will recognize income ...
Purchase this Solution
Free BrainMass Quizzes
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.