Jones transferred $15,000 cash and a building with an adjusted basis of $50,000 and a fair market
Question:
Jones transferred $15,000 cash and a building with an adjusted basis of $50,000 and a fair market value of $90,000 to Malibu Gardens Corporation in return for 90 percent of its only class of stock. In addition, for a bona fide business purpose, Malibu Gardens assumed the $65,000 outstanding mortgage on the building.
What is the amount of Jones’s recognized gain on the transfer?
a. $0
b. $5,000
c. $15,000
d. $25,000
e. None of the above
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Step by Step Answer:
To determine the amount of Joness recognized gain on the transfer we will calculate the realized gain and recognize how much of it is taxable Realized ...View the full answer
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Related Book For 
CCH Federal Taxation Basic Principles 2020
ISBN: 9780808051787
2020 Edition
Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback
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