🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Accounting
12
answers
0
watching
52
views
28 Nov 2019

Sue transferred a building to her newly formed corporation, RSTU Inc. The building had an adjusted basis to Sue of $75,000 and a fair market value of $150,000 on the date of the transfer. The building was encumbered by a mortgage of $100,000, which RSTU Inc. assumed. On the same day, and in exchange for the building she transferred to RSTU Inc., Sue received 100 percent of RSTU Inc.’s only class of stock. The fair market value of the stock at the date of transfer was $50,000. How much gain was recognized by Sue as a result of this transaction?

a. 0.

b. $25,000.

c. $50,000.

d. $75,000.

Watch
12
answers
0
watching
52
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Get unlimited access
Already have an account? Log in
Share
Get unlimited access
Already have an account? Log in
Share
Get unlimited access
Already have an account? Log in
Share
Get unlimited access
Already have an account? Log in
Share
Get unlimited access
Already have an account? Log in
Share
Get unlimited access
Already have an account? Log in
Share
Get unlimited access
Already have an account? Log in
Share
Get unlimited access
Already have an account? Log in
Share
Get unlimited access
Already have an account? Log in
Share
Get unlimited access
Already have an account? Log in
Share
Get unlimited access
Already have an account? Log in
Share
Jean Keeling
Jean KeelingLv2
11 May 2019
Get unlimited access
Already have an account? Log in
Share

Related questions

Sam, Sue, and Shelley formed a partnership. Sam received a 50 percent interest in the partnership in exchange for land with an adjusted basis to him of $30,000 and a fair market value of $50,000. Sue received a 25 percent interest in the partnership in exchange for $25,000 of cash. Shelley received a 25 percent interest in the partnership in exchange for $25,000 of cash. Six years after the date of contribution, the land contributed by Sam was sold by the partnership to an unrelated third party for $90,000. How much gain was required to be allocated to Sam as a result of the sale by the partnership?

a. $20,000

b. $30,000

c. $40,000

d. $60,000

Bob created MNO Inc. several years ago and has owned all 10outstanding shares of MNO Inc. since the creation of MNO Inc. Thefair market value of those shares is now $50,000. Bob’s friend,Lee, owns a building having a fair market value of $80,000 and anadjusted basis to Lee of $20,000. The building is encumbered by a$30,000 mortgage. Earlier this month, Bob and Lee discussed Lee’sbecoming involved in the business of MNO Inc., and as a result ofthese discussions, Lee transferred the building to MNO Inc. and inexchange for the building, MNO Inc. transferred to Lee 10 shares ofauthorized but not previously issued stock of MNO Inc. After thetransaction there were 20 shares of stock issued and outstanding.How much gain was realized and recognized by Lee as a result ofthis transaction?

Zhang incorporated her sole proprietorship by transferringinventory, a building, and land to the corporation in return for100 percent of the corporation’s 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 corporation’sstock 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?

Weekly leaderboard

Home
Homework Help 3,900,000
Accounting 580,000
Start filling in the gaps now
Log in