Purchase Solution

Business deduction

Not what you're looking for?

Ask Custom Question

24. Joe and Kay form Gull Corporation. Joe transfers cash of $250,000 for 200 shares in Gull Corporation. Kay transfers property with a basis of $50,000 and fair market value of $240,000. She agrees to accept 200 shares in Gull Corporation for the property and for providing bookkeeping services to the corporation in its first year of operation. The value of Kay's services is $10,000. With respect to the transfer:
a. Gull Corporation has a basis of $240,000 in the property transferred by Kay.
b. Neither Joe nor Kay recognize gain on the exchanges.
c. Gull Corporation has a business deduction under § 162 of $10,000.
d. Gull capitalizes $10,000 as organizational costs.
e. None of the above.

Purchase this Solution
Solution Summary

The response discusses a case of business deduction.

Solution Preview

Joe and Kay form Gull Corporation. Joe transfers cash of $250,000 for 200 shares in Gull Corporation. Kay transfers property with a basis of $50,000 and fair ...

Purchase this Solution
Free BrainMass Quizzes
Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

View More Free Quizzes
Related BrainMass Solutions

  • This post calculates business auto expenses for Teresa.

    476728 business auto expense Teresa is a civil engineer who uses her automobile for business evenly throughout the year. Teresa drove her automobile a total of $22,650 miles evenly during 2011, of which 95% was business mileage.

  • Federal Taxation

    572676 Federal Taxation Uniqueness of domestic production activities deduction (DPAD) Thomas began a business, Gold, Inc., on July 1, 2010. The business extracts and processes silver ore.

  • Home Office Deduction

    Step 2 When a person is an employee and he uses a part of his home for business, he may qualify for a deduction for its business use.

  • Sec. 179 Deduction for Qualifying Five-Year Equipment

    547665 Sec. 179 Deduction for qualifying five-year equipment Elaine owns an unincorporated manufacturing business. In 2011, she purchases and places in service $250,000 of qualifying five-year equipment for use in her business.

  • Dedudibility of Employment-related Expenses

    IRC section 162(a)(2) states that "There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including ... traveling expenses (including amounts expended

  • Tax benefits of net operating losses

    theft losses, state income tax on business profits, and any employee business expenses), and The standard deduction (if you do not itemize your deductions).

  • Components of Taxable Income

    Some deductions for AGI include the deduction for one-half of self employment tax, the deduction for contributions to a traditional individual retirement arrangement, and the deduction for the costs of moving related to the taxpayer's trade or business

  • Travel and Entertainment Tax Deductions

    Since the travel days count as business related yes the trip is primarily for business.

  • John Gemstone

    There is a clear distinction in the laws that no personal expenses will be allowed as deduction in computing the taxable income for any business organization.

View More Related Solutions