wing information applies to the questions displayed below.] rporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for nt of the corporation's stock. The property transferred to the corporation had the following fair market values ted tax bases: Adjusted Tax Basis $ 11,300 172,500 364,000 FMV $ 21,000 198,000 267,000
wing information applies to the questions displayed below.] rporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for nt of the corporation's stock. The property transferred to the corporation had the following fair market values ted tax bases: Adjusted Tax Basis $ 11,300 172,500 364,000 FMV $ 21,000 198,000 267,000
Chapter17: Property Transactions: § 1231 And Recapture Provisions
Section: Chapter Questions
Problem 48P
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![Required information
[The following information applies to the questions displayed below.]
Carla 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 values
and adjusted tax bases:
Adjusted Tax
Basis
FMV
$ 21,000
$ 11,300
Inventory
Building
Land
198,000
172,500
364,000
267,000
$ 486,000
$ 547,800
Total
The corporation also assumed a mortgage of $125,250 attached to the building and land. The fair market value of the
corporation's stock received in the exchange was $360,750. (Negative amounts should be indicated by a minus sign.
Leave no answer blank. Enter zero if applicable.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff35c5d9e-0e9c-43cb-9036-cbbd2c2e5839%2F0e53e4cb-ad8e-460e-a171-d246199c90c9%2F5xmwm3v_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Carla 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 values
and adjusted tax bases:
Adjusted Tax
Basis
FMV
$ 21,000
$ 11,300
Inventory
Building
Land
198,000
172,500
364,000
267,000
$ 486,000
$ 547,800
Total
The corporation also assumed a mortgage of $125,250 attached to the building and land. The fair market value of the
corporation's stock received in the exchange was $360,750. (Negative amounts should be indicated by a minus sign.
Leave no answer blank. Enter zero if applicable.)
Transcribed Image Text:a. What amount of gain or loss does Carla realize on the transfer of the property to the corporation?
Fair market value of stock received
360,750
Mortgage assumed by corporation
125,250
Amount realized
486,000
Adjusted tax basis of the property transferred
547,800
Gain realized
b. What amount of gain or loss does Carla recognize on the transfer of the property to her corporation?
Gain or loss recognized
c. What is Carla's basis in the stock she receives in her corporation?
Tax basis
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