Required: a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation? 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 received in the new corporation?
Required: a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation? 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 received in the new corporation?
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 55P
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Question
Transcribed Image Text: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 tax bases:
Inventory
Building
Land
Total
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.
Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.
Required:
a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation?
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 received in the new corporation?
Required A
FMV
$24,000
54, 250
181, 000
$ 259, 250
Complete this question by entering your answers in the tabs below.
Required B
Adjusted Tax
Basis
$ 12, 400
42, 250
58, 500
$ 113, 150
Gain or loss realized
Required C
What amount of gain or loss does Ramon realize on the transfer of the property to his corporation?
< Required A
Required B >
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