Diego transfers real estate with an adjusted basis of $446,000 and a fair market value of $624,400 to a newly formed corporation in exchange for 100% of the stock. The corporation assumes liability for the transferred real estate in the amount of $530,740. Determine Diego's recognized gain on the transfer and the basis for his stock.
Diego transfers real estate with an adjusted basis of $446,000 and a fair market value of $624,400 to a newly formed corporation in exchange for 100% of the stock. The corporation assumes liability for the transferred real estate in the amount of $530,740. Determine Diego's recognized gain on the transfer and the basis for his stock.
Chapter18: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 22CE
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Transcribed Image Text:Diego transfers real estate with an adjusted basis of $446,000 and a
fair market value of $624,400 to a newly formed corporation in
exchange for 100% of the stock. The corporation assumes liability
for the transferred real estate in the amount of $530,740.
Determine Diego's recognized gain on the transfer and the basis for
his stock.
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