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Problem 19-38 (LO 19-2) (Algo)

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[The following information applies to the questions displayed below.] Carla incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporations stock. The property transferred to the corporation had the following fair market values and adjusted tax bases:

	FMV	Adjusted Tax Basis
Inventory	$ 32,000	$ 16,500
Building	212,000	145,500
Land	297,000	348,000
Total	$ 541,000	$ 510,000

The corporation also assumed a mortgage of $156,000 attached to the building and land. The fair market value of the corporations stock received in the exchange was $385,000. (Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)

Problem 19-38 Part a (Algo)

a. What amount of gain or loss does Carla realize on the transfer of the property to the corporation?

b. What amount of gain or loss does Carla recognize on the transfer of the property to her corporation?

c. What is Carlas basis in the stock she receives in her corporation?