Karen, in forming a new corporation, transfers land to the corporation in exchange for 100 percent of the stock of the corporation. Karen's basis in the land is $1,680,000, and the corporation assumes a liability on the property in the amount of $1,848,000. The stock received by Karen has a fair market value of $3,360,000. If an amount is zero, enter "0". a.  What is the amount of gain or loss that must be recognized by Karen on this transfer? $ b.  What is the amount of Karen's basis in the corporation's stock? $ c.  What is the amount of the corporation's basis in the land?

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
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Karen, in forming a new corporation, transfers land to the corporation in exchange for 100 percent of the stock of the corporation. Karen's basis in the land is $1,680,000, and the corporation assumes a liability on the property in the amount of $1,848,000. The stock received by Karen has a fair market value of $3,360,000.

If an amount is zero, enter "0".

a.  What is the amount of gain or loss that must be recognized by Karen on this transfer?
$

b.  What is the amount of Karen's basis in the corporation's stock?
$

c.  What is the amount of the corporation's basis in the land?
$

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