Shania,Taylor,and Kelly Form a Corporation with the Following Contributions

question 77

Multiple Choice

Shania,Taylor,and Kelly form a corporation with the following contributions.

• A)If the corporation is a C corporation,Taylor has a recognized gain of $40,000,a stock basis of $100,000,and the corporation has a basis for the land of $100,000.
• B)If the corporation is an S corporation,Kelly has a recognized gain or loss of $0,a stock basis of $110,000,and the corporation has a basis for the building of $110,000.
• C)If the corporation is a C corporation,Shania has a recognized gain or loss of $0,a stock basis of $100,000,and the corporation has a basis for the cash of $100,000.
• D)Only a.and c.are correct.
• E)Only b.and c.are correct.

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Definitions:

Administrative Expenses

Administrative Expenses are overhead costs not directly tied to a specific function such as manufacturing, production, or sales, and can include salaries, rent, and office supplies.

Budgeting

A financial planning process whereby individuals or entities estimate their expected incomes and expenditures over a defined period.

Activity Variance

Activity variance calculates the difference between the planned quantity of activity and the actual quantity, analyzing the impact on costs and operational efficiency.

Direct Labor

The wages and benefits paid for the labor directly involved in the production of goods or services.