(4) Green decides to incorporate his cash basis sole proprietorship. On June 1, 2019, in exchange...

Transcribed Image Text:

(4) Green decides to incorporate his cash basis sole proprietorship. On June 1, 2019, in exchange for 100% of the stock of Gee Corp., he transfers the following to Gee Corp: Cash Machinery & Equip. Accounts Receivable Basis $10,000 $20,000 -0- FMV $10,000 $50,000 $60,000 Green also transfers $40,000 of unpaid accounts payable to Gee Corp. These payables when satisfied would give rise to current deductions. Must Green recognize any gain as a result of the transfer of his assets and liabilities to Gee Corp? (4) Green decides to incorporate his cash basis sole proprietorship. On June 1, 2019, in exchange for 100% of the stock of Gee Corp., he transfers the following to Gee Corp: Cash Machinery & Equip. Accounts Receivable Basis $10,000 $20,000 -0- FMV $10,000 $50,000 $60,000 Green also transfers $40,000 of unpaid accounts payable to Gee Corp. These payables when satisfied would give rise to current deductions. Must Green recognize any gain as a result of the transfer of his assets and liabilities to Gee Corp?

Answer rating: 100% (QA)

Yes Green must recognize gain as a result of the transfer of his assets and liabi... View the full answer