Ramon incorporated his 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 $ 11,500 $ 4,800 Building 52,750 36,500 Land 122,000 60,000 Total $ 186,250 $ 101,300 The fair market value of the corporation’s stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation? b. What amount of gain or loss does Ramon recognize on the transfer of the property to his corporation?
Ramon incorporated his 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 $ 11,500 $ 4,800 Building 52,750 36,500 Land 122,000 60,000 Total $ 186,250 $ 101,300 The fair market value of the corporation’s stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation? b. What amount of gain or loss does Ramon recognize on the transfer of the property to his corporation?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ramon incorporated his 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 | $ 11,500 | $ 4,800 |
| Building | 52,750 | 36,500 |
| Land | 122,000 | 60,000 |
| Total | $ 186,250 | $ 101,300 |
The fair market value of the corporation’s stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.)
a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation?
b. What amount of gain or loss does Ramon recognize on the transfer of the property to his corporation?
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