Boss Corporation (Boss) was formed in 2017. In 2020, Julio transfers land with a basis of $43,000
Question:
Boss Corporation ("Boss") was formed in 2017. In 2020, Julio transfers land with a basis of $43,000 and a fair market value of $87,000 to Boss in exchange for 85% of the stock of Boss plus a promissory note in the amount of $12,000. Boss also agrees to assume the original mortgage on the land (acquired 10 years ago) in the amount of $50,000. With respect to the transfer:
Select one:
a.
Julio will have a recognized gain on the transfer of $12,000.
b.
Julio will have no recognized gain on the transfer.
c.
Boss Corporation will have a basis of $62,000 in the land transferred by Julio.
d.
Boss Corporation will have a basis of $50,000 in the land transferred by Julio.
e.
None of these.
South Western Federal Taxation 2017 Corporations, Partnerships, Estates And Trusts
ISBN: 9781305874336
40th Edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young