Melanie and Sonny Form Bird Enterprises

question 44

Essay

Melanie and Sonny form Bird Enterprises. Sonny contributes cash of $100,000 and land worth $50,000 adjusted basis of $30,000). Melanie contributes land and a building worth $280,000 adjusted basis of $200,000) and performs services worth $20,000 associated with the formation of the entity. Melanie receives a two-thirds ownership interest and Sonny receives a one-third ownership interest. Determine the tax consequences of the contributions to Melanie, Sonny, and Bird if the business is:
a. An S corporation.
b. A C corporation
c. A partnership.

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Definitions:

Belarus

A landlocked country located in Eastern Europe, known for its rich history, cultural heritage, and being one of the republics that constituted the former Soviet Union.

Minsk

The capital city of Belarus, known for its historical architecture and vibrant cultural scene.

Terminal Punctuation

Punctuation marks such as periods, question marks, or exclamation points that indicate the end of a sentence.

Terminal Punctuation

The punctuation marks used at the end of a sentence, such as a period, question mark, or exclamation point, to indicate a full stop.