Lynn transfers land having a $50,000 adjusted basis, an $80,000 FMV, and $10,000 cash to Allied Corporation in exchange for 100 of allied stock The corporation assumes the $70,000 mortgage on the land Which of the following statements is correct A) Lynn recognizes no gain and the stock basis is $60...

Lynn transfers land having a $50,000 adjusted basis, an $80,000 FMV, and $10,000 cash to Allied Corporation

Question:

Lynn transfers land having a $50,000 adjusted basis, an $80,000 FMV, and $10,000 cash to Allied in exchange for 100% of allied stock. The assumes the $70,000 mortgage on the land. Which of the following statements is correct?
A) Lynn recognizes no gain and the stock basis is $60,000
B) Lynn recognizes a $10,000 gain and the stock basis is $60,000
C) Lynn recognizes no gain and the stock basis is $50,000.
D) Lynn recognizes a $10,000 gain and the stock basis is zero.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...