Amelia, a Cash Basis Taxpayer, incorporates her Sole Proprietorship in 2019. She transfers the following items to
Fantastic news! We've Found the answer you've been seeking!
Question:
Amelia, a Cash Basis Taxpayer, incorporates her Sole Proprietorship in 2019. She transfers the following items to the newly created Leggett Corporation: Cash-$40,000 (Adjusted Basis); $40,000 (Fair Market Value); Land- $280,000(Adjusted Basis); $280,000 (Fair Market Value); Mortgage Payable- $330,000 (Adjusted Basis); $330,000 (Fair Market Value). Amelia received only stock for the transfer of the assets to the newly created corporation. Which of the following is correct regarding the transfer?
- Amelia has Recognized Gain of $10,000
- Leggett Corporation’s basis in the Land is $280,000
- Amelia has no Recognized Gain or Recognized Loss
- Amelia has Recognized Gain of $50,000
Related Book For
Concepts in Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
Posted Date: