1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
azamat
3 years ago
6

Juan transferred 100 percent of his stock in Rosa Company to Azul Corporation in a Type B stock-for-stock exchange. In exchange,

he received stock in Azul with a fair market value of $1,000,000. Juan's tax basis in the Rosa stock was $400,000. What amount of gain does Juan recognize in the exchange and what is his basis in the Azul stock he receives?
a. $600,000 gain recognized and a basis in Azul stock of $400,000
b. No gain recognized and a basis in Azul stock of $400,000
c. $600,000 gain recognized and a basis in Azul stock of $1,000,000
d. No gain recognized and a basis in Azul stock of $1,000,000
Business
1 answer:
slega [8]3 years ago
7 0

Answer:

b. No gain recognized and a basis in Azul stock of $400,000

Explanation:

Data provided in the question

Transferred percentage = 100%

The fair market value of the stock he received is $1,000,000

And, the tax basis in the Rosa stock is $400,000

So by considering the above information, the $0 gains is recognized and his basis should equal to the tax basis i.e in the rosa stock i.e $400,000

Plus if the stock is sold for $1,000,000 than there would be a gain of $600,000 but in this case there is zero gain recognized

Hence, the option b is correct

You might be interested in
Suppose the number of firms you compete with has recently increased. You estimated that as a result of the increased competition
marysya [2.9K]

Answer and Explanation:

An increase in the number of firms increases the demand elasticity. As the demand elasticity increases from 2 to 3 it means you could encounter less demand if product prices are increased. At a demand elasticity of -3, it is regarded as inelastic demand and a change in price will not affect the demand for the product as customers are still likely to patronize the product example gasoline. Due to its high demand, an increase in price will not readily affect the demand for it. Therefore if you are to change the price from $10 at 2 to 3 demand elasticity increase, the percentage of increase from 2 to 3 is given as.

3-2/2 X 100 = 50%

The new charge (x) at -3 demand elasticity = 50%/3 = 0.66666666

The increase in the new charge is therefore $10 + $10x = $10 + $10(0.166666) = $11.67

3 0
3 years ago
A math formula in economics
krok68 [10]
It's C because 1-.15 is .85 then 1/.85 rounds to 1.18
5 0
3 years ago
Which of these is a characteristic of certificates of deposit (CDs)?
masha68 [24]

Answer:

They last for a certain period of time

Explanation:

Typically Certificates of Deposit are offered if the set amount is deposited and kept through the stated amount of time. (The length of the CD can be anywhere from 18 months to 3 years [most popular])  When the money is removed short of the stated time period a penalty is taken from the value of the CD.

5 0
2 years ago
Read 2 more answers
A 27-year U.S. Treasury bond with a face value of $1,000 pays a coupon of 6.00% (3.000% of face value every six months). The rep
nikdorinn [45]

Answer:

(A) $1,055.35  (B) $2,180.53  (C) $780.07  (D) $412.08.

Explanation:

The tenor of the bond is 27 years i.e. (27 * 2=) 54 periods of 6 months each (n).

Face Value (F) = $1,000

Coupon (C) = 6% annually = 3% semi annually = (3% * 1000 face value) = $30.

The Present Value (PV) of the Bond is computed as follows.

PV of recurring coupon payments + PV of face value at maturity

= \frac{C(1-(1+r)^{-n}) }{r} + \frac{F}{(1+r)^{n}}

A) Yield = 5.6% annually = 2.8% semi annually.

PV = \frac{30(1-(1.028)^{-54}) }{0.028} + \frac{1,000}{(1.028)^{54}}

= 830.25 + 225.10

= $1,055.35.

B) Yield = 1% annually = 0.5% semi annually.

PV = \frac{30(1-(1.005)^{-54}) }{0.005} + \frac{1,000}{(1.005)^{54}}

= 1,416.64 + 763.89

= $2,180.53.

C) Yield = 8% annually = 4% semi annually.

PV = \frac{30(1-(1.04)^{-54}) }{0.04} + \frac{1,000}{(1.04)^{54}}

= 659.79 + 120.28

= $780.07.

D) Yield = 15% annually = 7.5% semi annually.

PV = \frac{30(1-(1.075)^{-54}) }{0.075} + \frac{1,000}{(1.075)^{54}}

= 391.95 + 20.13

= $412.08.

4 0
2 years ago
Hearthstone, Inc., a home healthcare​ firm, has been using a single predetermined overhead allocation rate with direct labor hou
marta [7]

Answer:

Correct answer is B.

<u>$26.86 per mile</u>

Explanation:

Total estimated cost for travel = 94000

Total miles driven = 3500

Overhead allocation rate = total estimated cost/total miles

= 94000/3500

=26.85714 or 26.86

3 0
2 years ago
Other questions:
  • Steinberg Corporation and Dietrich Corporation are identical companies except that Dietrich is more levered. Both companies will
    5·1 answer
  • Alicia (age 27) is a single, full-time college student. she earns $13,200 from a part-time job and has taxable interest income o
    7·2 answers
  • True or false
    9·1 answer
  • Organizations are moving toward more ____-focused development approaches, seeking to improve not only the functionality of the s
    11·1 answer
  • In a recent year Sunland Company had net income of $360000, interest expense of $72000, and a times interest earned of 10. What
    12·1 answer
  • How would a customer sales force structure benefit Reliable Tools? A. It would help the company's salespeople become experts in
    11·2 answers
  • How can you solve circle geometry in a simple way​
    6·2 answers
  • You are on the team of executives at Star Bank. You have been meeting as a team to discuss the future of the bank, including big
    15·1 answer
  • On January 1, 2008 an asset was acquired for $30,000. Its useful life was expected to be 10 years and the salvage value is expec
    15·1 answer
  • On june 1, 2022, spk company signed a $100,000, one-year, 6 percent note payable. Interest and principal are due at maturity. Wh
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!