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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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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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