Mason transfers real estate with an adjusted basis of $520,000 and a fair market value of $715,000 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 $590,000. Determine Mason's recognized gain on the transfer and the basis for his stock.
Mason transfers real estate with an adjusted basis of $520,000 and a fair market value of $715,000 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 $590,000. Determine Mason's recognized gain on the transfer and the basis for his stock.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter12: Corporations: Organization, Capital Structure, And Operating Rules
Section: Chapter Questions
Problem 4CE
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Transcribed Image Text:Mason transfers real estate with an adjusted basis of $520,000 and a fair market value of
$715,000 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 $590,000.
Determine Mason's recognized gain on the transfer and the basis for his stock.
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