Required information [The following information applies to the questions displayed below.] Zhang 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 bases: Inventory Building Land Total FMV $ 88,000 660,000 1,012,000 $1,760,000 Adjusted Basis $ 44,000 440,000 1,320,000 $1,804,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $1,660,000. The transaction met the requirements to be tax-deferred under $351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) ssume the corporation assumed a mortgage of $1,860,000 attached to the building and land. Assume the fair market value of the uilding is now $1,100,000 and the fair market value of the land is $2,332,000. The fair market value of the stock remains $1,660,00 How much, if any, gain or loss does Zhang recognize on the exchange assuming the revised facts?
Required information [The following information applies to the questions displayed below.] Zhang 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 bases: Inventory Building Land Total FMV $ 88,000 660,000 1,012,000 $1,760,000 Adjusted Basis $ 44,000 440,000 1,320,000 $1,804,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $1,660,000. The transaction met the requirements to be tax-deferred under $351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) ssume the corporation assumed a mortgage of $1,860,000 attached to the building and land. Assume the fair market value of the uilding is now $1,100,000 and the fair market value of the land is $2,332,000. The fair market value of the stock remains $1,660,00 How much, if any, gain or loss does Zhang recognize on the exchange assuming the revised facts?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required information
[The following information applies to the questions displayed below.]
Zhang 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 bases:
Inventory
Building
Land
Total
FMV
88,000
660,000
1,012,000
$1,760,000
$
Adjusted
Basis
$
44,000
440,000
1,320,000
$1,804,000
The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the
corporation's stock received in the exchange was $1,660,000. The transaction met the requirements to be tax-deferred
under $351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
Assume the corporation assumed a mortgage of $1,860,000 attached to the building and land. Assume the fair market value of the
building is now $1,100,000 and the fair market value of the land is $2,332,000. The fair market value of the stock remains $1,660,000.
e. How much, if any, gain or loss does Zhang recognize on the exchange assuming the revised facts?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbcfa4abf-9d80-4e31-a96f-c71fbf108693%2F50a73ddf-35f4-4952-b9d4-be51de03f68f%2Fv94i44i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:I
Required information
[The following information applies to the questions displayed below.]
Zhang 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 bases:
Inventory
Building
Land
Total
FMV
88,000
660,000
1,012,000
$1,760,000
$
Adjusted
Basis
$
44,000
440,000
1,320,000
$1,804,000
The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the
corporation's stock received in the exchange was $1,660,000. The transaction met the requirements to be tax-deferred
under $351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
Assume the corporation assumed a mortgage of $1,860,000 attached to the building and land. Assume the fair market value of the
building is now $1,100,000 and the fair market value of the land is $2,332,000. The fair market value of the stock remains $1,660,000.
e. How much, if any, gain or loss does Zhang recognize on the exchange assuming the revised facts?
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