Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in 100 percent of the corporation's stock. The property transferred to the corporation had the following fair marke adjusted basis. Inventory Building Land Total FMV $ 20,000 250,000 530,000 $ 800,000 -Please highlight answer -The answer is NOT 388,000 Adjusted Basis $ 12,000 100,000 300,000 $ 412,000 1) The corporation also assumed a mortgage of $500,000 attached to the building and land. The fair market va corporation's stock received in the exchange was $300,000. The transaction met the requirements to be tax-de under $351. What amount of gain or loss does Zhang recognize on the transfer of the property to her corporati NOTES:
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in 100 percent of the corporation's stock. The property transferred to the corporation had the following fair marke adjusted basis. Inventory Building Land Total FMV $ 20,000 250,000 530,000 $ 800,000 -Please highlight answer -The answer is NOT 388,000 Adjusted Basis $ 12,000 100,000 300,000 $ 412,000 1) The corporation also assumed a mortgage of $500,000 attached to the building and land. The fair market va corporation's stock received in the exchange was $300,000. The transaction met the requirements to be tax-de under $351. What amount of gain or loss does Zhang recognize on the transfer of the property to her corporati NOTES:
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 25P
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Gg.115.
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 value and
adjusted basis.
Inventory
Building
Land
Total
FMV
$ 20,000
250,000
530,000
$ 800,000
Adjusted Basis
$ 12,000
100,000
300,000
$ 412,000
1) The corporation also assumed a mortgage of $500,000 attached to the building and land. The fair market value of the
corporation's stock received in the exchange was $300,000. The transaction met the requirements to be tax-deferred
under $351. What amount of gain or loss does Zhang recognize on the transfer of the property to her corporation?
NOTES:
-Please highlight answer
-The answer is NOT 388,000
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