Sam and Devon agree to go into business together selling college-licensed clothing. According to the agreement, Sam will contribute inventory valued at $146,000 in return for 80 percent of the stock in the corporation. Sam's tax basis in the inventory is $79,000. Devon will receive 20 percent of the stock in return for providing accounting services to the corporation (these qualify as organizational expenditures). The accounting services are valued at $36,500. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) d. What is Devon's tax basis in the stock he receives in return for his contribution of services to the corporation? Tax basis
Sam and Devon agree to go into business together selling college-licensed clothing. According to the agreement, Sam will contribute inventory valued at $146,000 in return for 80 percent of the stock in the corporation. Sam's tax basis in the inventory is $79,000. Devon will receive 20 percent of the stock in return for providing accounting services to the corporation (these qualify as organizational expenditures). The accounting services are valued at $36,500. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) d. What is Devon's tax basis in the stock he receives in return for his contribution of services to the corporation? Tax basis
Chapter16: Tax Research
Section: Chapter Questions
Problem 68LC
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Transcribed Image Text:Sam and Devon agree to go into business together selling college-licensed clothing. According to the agreement, Sam
will contribute inventory valued at $146,000 in return for 80 percent of the stock in the corporation. Sam's tax basis in the
inventory is $79,000. Devon will receive 20 percent of the stock in return for providing accounting services to the
corporation (these qualify as organizational expenditures). The accounting services are valued at $36,500. (Negative
amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
d. What is Devon's tax basis in the stock he receives in return for his contribution of services to the corporation?
Tax basis
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