Martin method of accounting. Martin incorporates the law practice and Note payable a (on equipment) operates transfers the following items to a new, solely-owned corporation. gain of a law practice Adjusted Basis FMV and as a sole has a Cash $10,000 $ 10,000 stock Equipment 80,000 100,000 basis of Accounts receivable 0 120,000 using the Accounts payable (deductible expenses) 0 60,000 cash
Martin operates a law practice as a sole using the cash method of accounting. Martin incorporates the law practice and transfers the following items to a new, solely-owned corporation. Adjusted Basis FMV Cash Equipment Accounts receivable Accounts payable (deductible expenses) Note payable (on equipment) $10,000 80,000 0 0 $ 10,000 100,000 120,000 60,000 a gain of and has a stock basis of
Test-Bank-Prentice-Halls-Federal-Tax-2010-23rd-Edition-Pope.docx