Question: Brutus Corporation transferred inventory basis of 10 fair market value

Brutus Corporation transferred inventory (basis of $10, fair market value of $30) and machinery used in a U.S. factory (basis of $50, fair market value of $75) to MapleLeaf, a newly formed corporation in Canada, in exchange for all of MapleLeaf's stock. Brutus previously deducted $30 of depreciation related to the machinery on its U.S. tax return. How much gain, if any, must Brutus recognize on the transfers of the property to MapleLeaf?

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  • CreatedSeptember 09, 2015
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