(1) Read IRC 351 and 357 B. (2) Whitney and Kate are deciding on whether to open up a partnership or a corporation. Please provide three questions to guide them in their decision. (3) Eventually Whitney and Kate decide to open a corporation and own it equally. Whitney transfers a car with a FMV of $25 and a cost basis of $5 in exchange of shares of the new corporation. Kate transfers $50 in exchange of shares of the new corporation. Please explain the tax consequences of: ● Whitney • Kate ● Corporation

(1) Read IRC 351 and 357 B. (2) Whitney and Kate are deciding on whether to open up a partnership or a corporation. Please provide three questions to guide them in their decision. (3) Eventually Whitney and Kate decide to open a corporation and own it equally. Whitney transfers a car with a FMV of $25 and a cost basis of $5 in exchange of shares of the new corporation. Kate transfers $50 in exchange of shares of the new corporation. Please explain the tax consequences of: ● Whitney • Kate ● Corporation

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter20: Corporations And Parterships

Section: Chapter Questions

Problem 28CE

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