Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value

Question:

Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000. They each transferred property in exchange for stock as follows: Percentage of The Worthington Corp. Stock Acquired Adjusted Basis Fair Market Value Property Building Land Gearty Olinto

The building was subject to a $20,000 mortgage that was assumed by The Worthington Corp. What amount of gain did Gearty recognize on the exchange?

a. $0

b. $20,000

c. $84,000

d. $104,000

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...

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