Albert transfers land (basis of $140,000 and fair market value of $320,000) to Gold Corporation for 80% of its stock and a note payable in the amount of $80,000. Gold assumes Albert's mortgage on the land of $200,000. As a result of the transfer, 1. Albert has a recognized gain on the transfer of $140,000. 2. Albert has a recognized gain on the transfer of $80,000. 3. Albert has a recognized gain on the transfer of $60,000. 4. Gold Corporation has a basis in the land of $220,000. 5. None of the above
Albert transfers land (basis of $140,000 and fair market value of $320,000) to Gold Corporation for 80% of its stock and a note payable in the amount of $80,000. Gold assumes Albert's mortgage on the land of $200,000. As a result of the transfer, 1. Albert has a recognized gain on the transfer of $140,000. 2. Albert has a recognized gain on the transfer of $80,000. 3. Albert has a recognized gain on the transfer of $60,000. 4. Gold Corporation has a basis in the land of $220,000. 5. None of the above
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Albert transfers land (basis of $140,000 and fair market value of $320,000) to Gold Corporation for 80% of its stock and a note payable in the amount of $80,000. Gold assumes Albert's mortgage on the land of $200,000. As a result of the transfer,
1. Albert has a recognized gain on the transfer of $140,000.
2. Albert has a recognized gain on the transfer of $80,000.
3. Albert has a recognized gain on the transfer of $60,000.
4. Gold Corporation has a basis in the land of $220,000.
5. None of the above
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