Janice and Thom form Level Corporation. Janice transfers equipment (worth $60,000, basis of $40,000) for 50% of the stock in Lev

Question

3 years ago

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Janice and Thom form Level Corporation. Janice transfers equipment (worth $60,000, basis of $40,000) for 50% of the stock in Lev

el. Thom transfers inventory (worth $20,000, adjusted basis of $15,000) and provides services worth $40,000 for 50% of the stock.
Because this transaction_______(meet or not) the control of the corporation requirement, Janice has income of $_______and Thom has income of $______.

Business

1 answer:

WINSTONCH [101] · Answer 1 · 2022-03-16T07:22:03+03:00

Answer:

Because this transaction MEET the control of the corporation requirement, Janice has income of $0 and Thom has income of $

Explanation:

Based on the information we were told that Thom provide service that is worth $40,000 which means that the amount of $40,000 is Thom income but we were not told that Janice has an income, which means that Janice will have an income of $0.

Hence, Because this transaction MEET the control of the corporation requirement, Janice has income of $0 and Thom has income of $

40,000.