Carla 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 values and adjusted tax bases: FMV Adjusted Tax Basis Inventory $ 20,000 $ 10,000 Building 150,000 100,000 Land 250,000 300,000 Total $ 420,000 $ 410,000 The corporation also assumed a mortgage of $120,000 attached to the building and land. The fair market value of the corporation’s stock received in the exchange was $300,000
4. Carla 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 values and adjusted tax bases:
|
|
FMV |
Adjusted Tax Basis |
|
Inventory |
$ 20,000 |
$ 10,000 |
|
Building |
150,000 |
100,000 |
|
Land |
250,000 |
300,000 |
|
Total |
$ 420,000 |
$ 410,000 |
The corporation also assumed a mortgage of $120,000 attached to the building and land. The fair market value of the corporation’s stock received in the exchange was $300,000. (Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
What amount of gain or loss does Carla realize on the transfer of the property to the corporation?
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