Carl transfers land to Cardinal Corporation for 90% of the stock in Cardinal Corporation worth $20,000...

 

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Carl transfers land to Cardinal Corporation for 90% of the stock in Cardinal Corporation worth $20,000 plus a note payable to Carl in the amount of $40,000 and the assumption by Cardinal Corporation of a mortgage on the land in the amount of $100,000. The land, which has a basis to Carl of $70,000, is worth $160,000. a. Cardinal Corporation will have a basis of $160,000 in the land transferred by Carl. b. Carl will have a recognized gain on the transfer of $30,000. Oc. Carl will have a recognized gain on the transfer of $90,000. d. Cardinal Corporation will have a basis of $70,000 in the land transferred by Carl. e. None of these choices are correct. Carl transfers land to Cardinal Corporation for 90% of the stock in Cardinal Corporation worth $20,000 plus a note payable to Carl in the amount of $40,000 and the assumption by Cardinal Corporation of a mortgage on the land in the amount of $100,000. The land, which has a basis to Carl of $70,000, is worth $160,000. a. Cardinal Corporation will have a basis of $160,000 in the land transferred by Carl. b. Carl will have a recognized gain on the transfer of $30,000. Oc. Carl will have a recognized gain on the transfer of $90,000. d. Cardinal Corporation will have a basis of $70,000 in the land transferred by Carl. e. None of these choices are correct.

Answer rating: 100% (QA)

Solution correct option is None of these explaination ... View the full answer