Pursuant to a Type D corporate reorganization, Cheng Corp. transferred some of its assets to newly formed
Question:
Pursuant to a Type D corporate reorganization, Cheng Corp. transferred some of its assets to newly formed Racine Corp. The assets transferred had a basis of $60,000 and a value of $90,000, and were subject to a liability of $67,000.
In exchange for the assets, Cheng Corp.
received 100 percent oft he stock in Racine which it then distributed to its shareholders in a qualifying spin-off under Section 355.
What amount of income must Cheng Corp.
recognize as a result of the reorganization?
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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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