Jack and Dan agree to go into business together selling clothing. According to the agreement,...
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Accounting
Jack and Dan agree to go into business together selling clothing. According to the agreement, Jack will contribute inventory valued at $91,200 in return for 80 percent of the stock in the corporation. Jacks tax basis in the inventory is $50,160. Dan will receive 20 percent of the stock in return for providing accounting services to the corporation (these qualified as organizational expenditures). The accounting services are valued at $22,800. (Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
c. What amount of income gain or loss does Dan realize on the formation of the corporation? What amount, if any, does he recognize?
income, gain or loss realized = $22,800
income, gain or loss recognized = ? (not 0)
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