Allen, Beth, and Charlie formed Brick Corporation. Allen and Beth each received one-third of Brick stock in exchange for property transferred. Charlie contributed services in exchange for his one-third stock ownership. Are these exchanges taxable under Section 351? Also, explain Section 351 transactions in general and describe several steps they can take to reduce their tax liability.
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Allen, Beth, and Charlie formed Brick Corporation. Allen and Beth each received one-third of Brick stock in exchange for property transferred. Charlie contributed services in exchange for his one-third stock ownership. Are these exchanges taxable under Section 351? Also, explain Section 351 transactions in general and describe several steps they can take to reduce their tax liability.
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- A taxpayer operates a business through a single-member LLC (disregarded for federal tax purposes). The taxpayer contributes $30,000 cash and equipment worth $50,000 (having an adjusted basis of $20,000) to the LLC to fund its operations. The LLC obtains a loan from a bank of $100,000. Because the LLC has no established credit, the taxpayer has to personally guarantee the loan. What is the taxpayer's amount at risk? O The taxpayer is at risk in the amount of $30,000. The taxpayer is at risk in the amount of $50,000. O The taxpayer is at risk in the amount of $80,000. O The taxpayer is at risk in the amount of $150,000.If husband and wife are both employed, which is correct regarding their income tax exemption in the tax table? A. Each spouse shall be entitled to a P250,000 income tax exemption in the tax table. B. Each spouse is allowed P500,000 income tax exemption in the tax table C. Either the husband or the wife can take advantage of the P500,000 income exemption in the tax table. D. Only the husband shall be allowed P250,000 income tax exemption in the tax table. What is the basis of the computation of the optional income tax? A. Net taxable income B. Goss sales/receipt in excess of P250,000 C. Net compensation income D. Gross sales/receipt As a rule non-profit, non-stock corporations are exempt from income tax. which of these non-profit entities is subject to income tax? A. Association B. School C. Farmers' cooperative D. Hospital Benguet State University, a public educational institution, is: A. Subject to income tax…Which of the following is not true? Taxpayers must file a federal income tax return if their gross income exceeds the standard deduction amount set for their filing status If Tony's wife died on January 1, 2020 and he remarried on December 31, 2020, he can only file either married filing jointly or married filing separately with his new wife. The 16th Amendment to the US Constitution legalized the direct taxation of individuals' income. For US tax purposes, the tax rate on individuals' income is a flat rate