Leslie transfers a property (A/B $20,000, FMV $50,000) to Lily Corp. in exchange for 100% of the Lily stock. The property is subject to a liability of $10,000, which Lily assumes. The transfer is for business purpose, and the $10,000 liability was for business purpose. What is Leslie recognized gain? (b) What is Leslie’s stock basis in the corporation? (c) What is Lily’s basis in the property?

Answer rating: 100% (QA)

a If the liability exceeds the adjusted basis in the property transferred ... View the full answer