$\mathrm{}$Zhang incorporated her sole proprietorship by transferring 

 

inventory, a building, and land to the corporation in return for

$100$ percent of the corporation$$s stock. The property transferred to

the corporation had the following fair market value and adjusted

basis.

$$FMV$$Adjusted

Basis

$$Inventory$$$$20,000$$

$12,000$

$$Building$150,000100,000$

$$Land$$

$230,000$

$300,000$

$$Total$$$

$400,000$$

$412,000$The corporation also assumed a mortgage of $$100,000$ attached to

the building and land. The fair market value of the corporation$$s

stock received in the exchange was $$300,000.$ The transaction met

the requirements to be tax$-$deferred under $351.$ What amount of gain

or loss does Zhang$$recognize$$on the transfer of

the property to her corporation?$5.$ Based upon the facts in the prior question, what is Zhang's

tax basis in the stock she receives in the exchange?$6.$Based on the facts in the two prior questions, what is the

corporation's adjusted basis in the land received in the

exchange?

Answer rating: 100% (QA)

Answer Analyzing Zhangs Incorporation We can analyze the tax implications of Zhang incorporating her ... View the full answer