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28 Sep 2019
Zhang incorporated her sole proprietorship by transferringinventory, a building, and land to the corporation in return for100 percent of the corporationâs stock. The property transferred tothe corporation had the following fair market values and taxbases:
FMV Tax Basis
Inventory $ 20,000 $ 10,000
Building 150,000 100,000
Land 230,000 70,000
Total $ 400,000 $ 180,000
The corporation also assumed a mortgage of $200,000 attached tothe building and land. The fair market value of the corporationâsstock received in the exchange was $220,000. The exchange met therequirements to be tax-deferred under §351.
. What amount of gain does Zhangrecognize on the transfer of the property to hercorporation?
Zhang incorporated her sole proprietorship by transferringinventory, a building, and land to the corporation in return for100 percent of the corporationâs stock. The property transferred tothe corporation had the following fair market values and taxbases:
FMV Tax Basis
Inventory $ 20,000 $ 10,000
Building 150,000 100,000
Land 230,000 70,000
Total $ 400,000 $ 180,000
The corporation also assumed a mortgage of $200,000 attached tothe building and land. The fair market value of the corporationâsstock received in the exchange was $220,000. The exchange met therequirements to be tax-deferred under §351.
. What amount of gain does Zhangrecognize on the transfer of the property to hercorporation?
Nelly StrackeLv2
28 Sep 2019