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15 March, 20:16

Ashley and Benjamin are the sole owners of Super Corporation. Ashley owns 40% of the stock and Benjamin owns 60%. Several years after the creation of the corporation, Ashley contributes an additional $20,000 in cash and Benjamin contributes additional property with a fair market value of $30,000 and an adjusted basis of $25,000.

What amount of income is recognized by Super Corporation as a result of these contributions?

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  1. 15 March, 20:25
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    Explanation:

    The corporation do not recognize income from the contribution of partners. Dong so, will false the revenue recognition as it would be generated at will fom the partners and then distribute as "dividends" while in fact they are moving cash form one place to another

    The difference in the property fair value and the adjusted basis will be a gain on Benjamin not for the Partnership
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