Tinker incorporates his sole proprietorship by transferring a building, equipment, and inventory to the Tinker Corporation in exchange for all its stock The building has a value of $750,000 and a basis of $800,000, the equipment has a value of $400,000 and a basis of $375,000, and the inventory has...

a 50000 realized loss on the building 750000 800000 and a 25000 realized gain on the equipment 40000 ...

Tinker incorporates his sole proprietorship by transferring a building, equipment, and inventory to the Tinker Corporation in

Question:

Tinker incorporates his sole proprietorship by transferring a building, equipment, and inventory to the Tinker in exchange for all its stock. The building has a value of $750,000 and a basis of $800,000, the equipment has a value of $400,000 and a basis of $375,000, and the inventory has both a value and basis of $50,000.
a. What is Tinker's gain or loss realized on the transfer?
b. What is Tinker's gain or loss recognized on the transfer?
c. What is his basis in the stock received and the corporation's basis in the property transferred? Explain your answer.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...