Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000. They each transferred property in exchange for stock as follows: Property Adjusted Basis Fair Market Value Percentage of The Worthington Corp. Stock Acquired Gearty Building $80,000 $164,000 60% Olinto Land 10,000 96,000 40% The building was subject to a $20,000 mortgage that was assumed by The Worthington Corp. What was Gearty's basis in The Worthington Corp. stock? a.$164,000 b.$80,000 c.$60,000 d.$0
Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000. They each transferred property in exchange for stock as follows: Property Adjusted Basis Fair Market Value Percentage of The Worthington Corp. Stock Acquired Gearty Building $80,000 $164,000 60% Olinto Land 10,000 96,000 40% The building was subject to a $20,000 mortgage that was assumed by The Worthington Corp. What was Gearty's basis in The Worthington Corp. stock? a.$164,000 b.$80,000 c.$60,000 d.$0
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 1BCRQ
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Becker CPA Review 18-3
Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair market value of $240,000. They each transferred property in exchange for stock as follows:
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The building was subject to a $20,000 mortgage that was assumed by The Worthington Corp. What was Gearty's basis in The Worthington Corp. stock?
a.$164,000
b.$80,000
c.$60,000
d.$0
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