Ask Question, Ask an Expert


Ask Accounting Basics Expert

FAS Inc. had one class of stock outstanding. The one class of stock was owned 50 percent by Fred and 25 percent by each of Fred's two sons. In the current taxable year, FAS Inc. redeemed 25 percent of Fred's 50 percent, and in exchange for the stock, FAS Inc. distributed to Fred a building that had an adjusted basis to FAS Inc. of $10,000 and a fair market value of $50,000. Assume that FAS Inc.'s current earnings and profits were $200,000, there were no accumulated earnings and profits, and Fred's total basis in his stock before the redemption was $20,000. What is Fred's basis in his remaining stock after the redemption, and what is his basis in the building distributed to him?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M947156

Have any Question? 

Related Questions in Accounting Basics

Explain what is meant by accruals and prepayments andhow

Explain what is meant by accruals and prepayments, and How they affect the trial balance.

Part 1the chief executive officer ceo of a pharmaceuticals

Part 1 The chief executive officer (CEO) of a pharmaceuticals company wants to invest in new architecture and art for the company headquarters. You have been chosen to recommend artwork for the new location. Review the f ...

Q1 harbour cruises limited started business on 1 july 2015

Q1. Harbour Cruises Limited started business on 1 July 2015 and completed its first statement of comprehensive income and first statement of financial position on 30 June 2016. The statements are prepared before consider ...

Problem -a firm is considering the purchase of one machine

Problem - A firm is considering the purchase of ONE machine (i.e., A and B are mutually exclusive). Machine A will cost $40,000, generate sales of $20,000 per year for 5 years and have annual costs of $7,500.  Machine B ...

Example of manual accounting - the bad old daysthe benjamin

Example of Manual Accounting - The bad old days The Benjamin Company completed these transactions during January of the current year: January 1, Began business by selling stock for $750,000.00.   January 1, Rented office ...

How can confidential data and information such as the wages

How can confidential data and information (such as the wages of individual employees) be kept confidential and yet still be available to managers who need them?

Identifying account titles-the following are independent

Identifying Account Titles- The following are independent situations. a. A new company is formed and sells 100 shares of stock for $12 per share to investors. b. A company purchases for $18,000 cash a new delivery truck ...

Writing assignmentthe writing assignment has to be between

Writing Assignment The writing assignment has to be between 650-700 words. With 2-3 references to follow, one in particular has to be from the book we are studying out of: Intermediate accounting (7th ed.). Spiceland, Se ...

Discussionpart 1please respond the following question no

DISCUSSION PART 1 PLEASE RESPOND THE FOLLOWING QUESTION NO LESS THEN 350 WORDS (ORIGINAL WORK, NO PLAGIARISM, 1 Reference "Financial Statement Analysis" Please respond to the following: • Evaluate at least factors that m ...

Wanda a calendar year taxpayer owned a building adjusted

Wanda, a calendar year taxpayer, owned a building (adjusted basis of $250,000) in which she operated a bakery that was destroyed by fire in December 2015. She receives insurance proceeds of $290,000 for the building the ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate