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 bases: FMV Adjusted Basis Inventory $ 15,750 $ 9,500 Building 71,500 54,750 Land 195,000 72,500 Total $ 282,250 $ 136,750
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 bases: FMV Adjusted Basis Inventory $ 15,750 $ 9,500 Building 71,500 54,750 Land 195,000 72,500 Total $ 282,250 $ 136,750
Chapter13: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 30CE
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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 bases:
| FMV | Adjusted Basis | ||||
| Inventory | $ | 15,750 | $ | 9,500 | |
| Building | 71,500 | 54,750 | |||
| Land | 195,000 | 72,500 | |||
| Total | $ | 282,250 | $ | 136,750 | |
|
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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.
b. What amount of gain or loss does Ramon recognize on the transfer of the property to his corporation?
c. What is Ramon’s basis in the stock he receives in his corporation?
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