Bob transfers assets with a $100,000 FMV (basis $60,000) and $70,000 of business-related liabilities to a corporation in exchange for 100% of the corporation's stock with a FMV of $30,000. The corporation assumes the $70,000 mortgage. The transfer qualifies under Sec. 351. What is Bob's gain recognized on the transfer? Group of answer choices $10,000 $40,000 $0 $30,000

Bob transfers assets with a $100,000 FMV (basis $60,000) and $70,000 of business-related liabilities to a corporation in exchange for 100% of the corporation's stock with a FMV of $30,000. The corporation assumes the $70,000 mortgage. The transfer qualifies under Sec. 351. What is Bob's gain recognized on the transfer? Group of answer choices $10,000 $40,000 $0 $30,000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter18: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 22CE

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Question. 15
Henry transfers property with an adjusted basis of $95,000 and an FMV of $100,000 to a newly formed corporation in a Sec. 351 exchange. Henry receives stock with an FMV of $85,000 and a short-term note with a $15,000 FMV. Henry's basis in the stock is A. $90,000. B. $85,000. C. $100,000. D. $95,000.
An individual transfers $5,000 and a piece of land to a corporation in exchange for all of its stock. At the time of transfer, the land has an adjusted basis of $50,000 and a fair market value (FMV) of $75,000. The corporation assumes a $60,000 mortgage on the land as part of the transfer for a bona fide business purpose. What is the effect of the transfer?
Prepare your answers using excel or clearly written computations. Show your work for maximum points. 3. Diego transfers real estate with an adjusted basis of $260,000 and fair market value of $350,000 to a newly formed corporation in exchange for 100% of the stock. The corporation assumes the liability on the transferred real estate in the amount of $300,000. Determine Diego’s recognized gain on the transfer and the basis for his stock.
Brett and Illain formed a new Corporation by transferring the following assets in exchange for stock:▪ Brett transferred: Property subject to a 70,000 mortgage; FMV $1,000000, Basis 500,000. In exchange, she received 200 shares of Stock and relief of the mortgage liability. ▪ Illain transferred: Inventory with a Basis of 15,000 and FMV 150,000. Required:a. What is Brett’s basis in the stock she received b. What is Brett’s recognized gain/loss
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Q.98. Smith and Jones create SJ Corporation. Smith contributes property with a fair market value of $80,000, and Jones contributes cash of $70,000. Each receives a 50% share in the corporation, and the corporation is valued at $140,000 immediately after the formation. Smith's property has an adjusted basis of $25,000, and is subject to a $10,000 mortgage, which is assumed by the company. What gain will Smith recognize in this situation? A. $0 B. $10,000 C. $15,000 D. $25,000
Mai is going to contribute the following assets to a business entity in exchange for an ownership interest. Adjusted Basis FMV Cash $100,000 $100,000 Land and building 60,000 95,000 What are the tax consequences of the contribution to Mai if the business entity is a(n): a. Sole proprietorship? b. General partnership? c. Limited partnership? d. C corporation? e. S corporation?
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Tony Smith and Bill Jones buy property for $500,000. Tony and Bill organize a corporation when the property has a fair market value of $700,000. They transfer the property to the corporation for all its authorized capital stock, which has a par value of $700,000. What amount of gain is recognized by Tony? A. $0 B. $250,000 C. $500,000 D. $700,000