Amos Contributes Land with an Adjusted Basis of $150,000 and a Fair

question 43

True/False

Amos contributes land with an adjusted basis of $150,000 and a fair market value of $200,000 to White, Inc., an S corporation, in exchange for 50% of the stock of White, Inc. Carol contributes cash of $200,000 for the other 50% of the stock. If White later sells the land for $225,000, $62,500 [$50,000 + 50%($25,000)] is allocated to Amos and $12,500 ($25,000 × 50%) is allocated to Carol.

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Definitions:

Incentive Wage Plans

Compensation systems that link a portion of employees' pay to their performance or productivity, aiming to motivate higher levels of output or quality.

Unity of Command Principle

A management principle stating that each employee should report to only one manager, to avoid confusion and conflict in instructions and authority.

Scientific Management

A theory in management focusing on improving economic efficiency, especially labor productivity, by systematically analyzing workflow and processes.

Frederick Taylor

was an American mechanical engineer who sought to improve industrial efficiency and is known as the father of scientific management.