Determine the tax consequences on the transfer


Problem: Dan Dash has decided to incorporate his retailing business. On July 1, he plans to transfer the assets of the business to Dash Inc., a corporation owned wholly by him, in exchange for a note of $535,000, being the fair market value of the assets. The assets of the retailing business are as follows: FMV COST UCC Accounts receivable $ 5,000 $ 8,000 Inventory 200,000 120,000 Land 60,000 20,000 Building 180,000 160,000 $ 100,000 Class 8 Equipment 50,000 100,000 70,000 Goodwill 40,000 0 0 Total $ 535,000 $ 408,000 $ 170,000 Dan also plans to transfer his shares of Grape Expectations, a publicly-traded company, to Dash Inc. He purchased the shares of Grape Expectations two years ago for $60,000. He plans to transfer them to Dash Inc. for $50,000, the estimated fair market value. Required: 1. Assuming Dan does NOT utilize any special tax elections, determine the tax consequences on the transfer by completing the charts below. Enter negative amounts with a minus (-) sign. If an amount is zero, enter "0". If an amount is not applicable to a particular asset

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Taxation: Determine the tax consequences on the transfer
Reference No:- TGS03289608

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