Required information

Problem 19-39 (LO 19-2) (Static)

Skip to question

[The following information applies to the questions displayed below.] Ivan incorporated his 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: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.)

	FMV	Adjusted Tax Basis
Inventory	$ 10,000	$ 15,000
Building	50,000	40,000
Land	60,000	30,000
Total	$ 120,000	$ 85,000

The fair market value of the corporations stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ivan. The transaction met the requirements to be tax-deferred under 351.

Problem 19-39 Part a (Static)

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

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

c. What is Ivans basis in the stock he receives in his corporation?

d. What is the corporations adjusted tax basis in each of the assets received in the exchange?