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2. Jeff a real estate broker and investor. He normally

Question : 2. Jeff a real estate broker and investor. He normally : 2424

2. Jeff is a real estate broker and investor. He normally buys real estate and sells it quickly. He is fully licensed as a real estate broker in Texas. Jeff has a vacant lot that he paid $1,500,000 several years ago. The FMV is currently $1,000,000.

3. All three create JPJ, Inc with one third ownership each. In year one they consider the following: 4.

The corporation will distribute out to Jason a part of the parking lot (of the old location). The FMV is $200,000 and the basis to the corporation is $75,000. Jason will contribute the new land with a FMV of 150,000 plus $50,000 in cash.

5. Separately, they want to pay a distribution of $25,000 to each shareholder in cash. The EP balance is zero for accumulated and $40,000 for current.

Assignments:

What is the tax income consequences idea #4?

What is the income tax consequences idea #5?

Is there a better economic structure that will give the three people the result they desire? If so what is it and defend the idea?

Solution
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Taxation 1 Year Ago 266 Views
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