In a Section 351 exchange, Max transfers property to his corporation worth $30,000. His basis in...

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In a Section 351 exchange, Max transfers property to his corporation worth $30,000. His basis in it was $8,000, and it was subject to $11,000 of debt. In exchange he received $19,000 of stock in the corporation. How much gain, if any, will Max recognize on the exchange? In a Section 351 exchange, Max transfers property to his corporation worth $30,000. His basis in it was $8,000, and it was subject to $11,000 of debt. In exchange he received $19,000 of stock in the corporation. How much gain, if any, will Max recognize on the exchange?

Answer rating: 100% (QA)

According to Section 351 no gain or loss shall be recognized if the transfer of property to the corporation is made solely in the exchange for stock in the corporation This is followed by the immediate transfer of control in the corporation after the exchange Therefore Max will not recognize ... View the full answer