Question: Myrtle loaned Sven 150 000 for his gardening supplies company A

Myrtle loaned Sven $150,000 for his gardening supplies company. A drought occurred during the year. Because Sven was unable to repay the loan, Myrtle accepted the following plan to extinguish Sven’s debt. Sven is to pay cash of $3,000 and transfer ownership of the gardening property having a value of $80,000 and a basis of $60,000. Sven must also transfer stock with a value of $30,000 and a basis of $45,000. Find a relevant Treasury Regulation. Read Code Section 108 and James J. Gehl, 102 T.C. 74 (1994). Determine how much gross income Sven should report from the extinguishment of his debt.

Sale on SolutionInn
  • CreatedOctober 04, 2014
  • Files Included
Post your question