Problem $11-20$

Corporate Formation $($LO $11\mathrm{.}7)$

Karen, in forming a new corporation, transfers land to the corporation in exchange

for $100$ percent of the stock of the corporation. Karen's basis in the land is

$$280,000,$ and the corporation assumes a liability on the property in the amount

of $$300,000.$ The stock received by Karen has a fair market value of $$550,000.$

If an amount is zero, enter $"0".$

a$.$ What is the amount of gain or loss that must be recognized by Karen on this

transfer?

$

b$.$ What is the amount of Karen's basis in the corporation's stock?

$

c$.$ What is the amount of the corporation's basis in the land?

$