ACC 455 Week 2 Individual Problem Set

May 8th, 2015
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ACC 455 Week 2 Individual Problem Set

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Week 2 Individual C: 2-3 Black LLC.What a company chooses to establish itself as a limited liability company it is taxed according to the number of owners. Because Black LLC has two owners the default tax classification would be a partnership, but the owners still experience the limited liability of a corporation. The other tax classification Bruce and Bob can choose is to be taxed as a corporation. The owners need to file a Form 8832.The other requirements are to distribute all the assets to the corporation in exchange for stock, filing articles of incorporation, paying state incorporation fees, and investing a minimum amount of capital. The tax consequences of doing this is the partnership cannot change its corporation status back to a partnership for 60 months. Any gain or loss can be deferred as long as the planned sale of stock is not arranged before forming the corporation, a boot is not received, and control of the company to the owners happens upon transfer of all assets and liability. C: 2 -54 Bear CorporationA) All members are in control of the corporation after the exchange. There is more than 80% control of all other owners beside Dick. So yes the requirements of Sec. 351 are met.B) Alice will not realize any gain because no boot is received with the transfer of assets. Alice recognizes a $10,000 gain the amount by which the $60,000 mortgage assumed by Bear exceeds the $50,000 basis.Bob will realize a 10,000 gain. The lessor of 15,000 and 10,000. As

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