Acc/291 Week 4 Individual

Yazan Al Herbawi AC553 Assignment Week 5 Chapter 14 Question 4: computer code Sec. 351 allows investors to avoid recognizing gains on transfers of assets to a corporation in backtrack of property. The purpose is to avoid discouraging investors from contributing to corporations. Corporations be considered probative stimulants of the economy. Question 20: Corporations whitethorn elect a calendar year, or a fiscal year, regardless of the tax historic period of its owners. Partnerships need to have the same tax year as the principal partners. S corporations are required to adopt the calendar year for tax purposes. The difference as illustrated is that corporations have to a greater extent flexibility is choosing their tax year. Both, personal service corporations and S corporations may elect a fiscal year if they can name a business purpose for it. Question 22: Corporations are allowed to net long-term crownwork gains/ losses against short-term gains and losses to arrive at a net gain/loss. If some(prenominal) long-term and short-term balances where the same trend, i.e. both gains and both losses, they essential be reported separately. Net capital gains are taxed as ordinary income. However, net capital losses may non be deducted in the year incurred.

They may only be deducted against net capital gains carried 3 years backwards with the stay balance carried 5 years forward. caper 55: a. in that respect are no tax consequences to Susan at transfer. However, her basis in previously owned stock will be change magnitude by the adjusted basis of the contributed asset, i.e. 2,000. b. The corporation will cut no income on such a transaction until now though no stock has been issued. The corporation will opinion the adjusted basis of the contribution of 2,000 to a special additional-paid-in capital account illustrating an increase in the price paid by the shareholder. c. Susan basis in the new share will be equal to the adjusted basis of the property given up. Problem 62: The corporations...

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