Preincorporation. Cummings, Okawa, and Taft arerecent college graduates who want to form a corporation tomanufacture and sell digital tablets. Peterson tells them he willset in motion the formation of their corporation. First, Peterson makes a contract with Owens for the purchase of a pieceof land for $20,000. Owens does not know of the prospectivecorporate formation at the time the contract is signed. Second,Peterson makes a contract with Babcock to build a small planton the property being purchased. Babcock’s contract is conditional on the corporation’s formation. Peterson secures allnecessary subscription agreements and capitalization, and hefiles the articles of incorporation. (See Formation and Powers.)

Preincorporation. Cummings, Okawa, and Taft arerecent college graduates who want to form a corporation tomanufacture and sell digital tablets. Peterson tells them he willset in motion the formation of their corporation. First, Peterson makes a contract with Owens for the purchase of a pieceof land for $20,000. Owens does not know of the prospectivecorporate formation at the time the contract is signed. Second,Peterson makes a contract with Babcock to build a small planton the property being purchased. Babcock’s contract is conditional on the corporation’s formation. Peterson secures allnecessary subscription agreements and capitalization, and hefiles the articles of incorporation. (See Formation and Powers.)

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 1RP

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