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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 tax bases. Inventory Building Land Total FMV $ 56,000 420,000 644,000 $ 1,120,000 Adjusted Tax Basis $ 28,000 280,000 840,000 $ 1,148,000 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 $1,020,000. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Problem 19-40 Part a (Algo) a. What amount of gain or loss does Zhang realize on the transfer of the property to the corporation?

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 tax bases. Inventory Building Land Total FMV $ 56,000 420,000 644,000 $ 1,120,000 Adjusted Tax Basis $ 28,000 280,000 840,000 $ 1,148,000 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 $1,020,000. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Problem 19-40 Part a (Algo) a. What amount of gain or loss does Zhang realize on the transfer of the property to the corporation?

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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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 tax bases Inventory Building Land Total FMV $ 56,000 420,000 644,000 $ 1,120,000 Adjusted Tax Basis $ 28,000 280,000 840,000 $ 1,148,000 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 $1,020,000. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Problem 19-40 Part a (Algo) a. What amount of gain or loss does Zhang realize on the transfer of the property to the corporation?
Transcribed Image Text: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 tax bases Inventory Building Land Total FMV $ 56,000 420,000 644,000 $ 1,120,000 Adjusted Tax Basis $ 28,000 280,000 840,000 $ 1,148,000 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 $1,020,000. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. Problem 19-40 Part a (Algo) a. What amount of gain or loss does Zhang realize on the transfer of the property to the corporation?
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