Required information [The following information applies to the questions displayed below.] 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 values and adjusted tax bases: Inventory Building Land Total FMV $ 36,000 270,000 414,000 Adjusted Tax Basis $ 18,000 180,000 540,000 $ 720,000 $ 738,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $620,000. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. b. What amount of gain or loss does Zhang recognize on the transfer of the property to the corporation? Answer is complete but not entirely correct. Gain or loss recognized $ (118,000)
Required information [The following information applies to the questions displayed below.] 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 values and adjusted tax bases: Inventory Building Land Total FMV $ 36,000 270,000 414,000 Adjusted Tax Basis $ 18,000 180,000 540,000 $ 720,000 $ 738,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $620,000. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. b. What amount of gain or loss does Zhang recognize on the transfer of the property to the corporation? Answer is complete but not entirely correct. Gain or loss recognized $ (118,000)
Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 84P
Related questions
Question
![Required information
[The following information applies to the questions displayed below.]
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 values
and adjusted tax bases:
Inventory
Building
Land
Total
FMV
$ 36,000
270,000
414,000
Adjusted Tax
Basis
$ 18,000
180,000
540,000
$ 720,000
$ 738,000
The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the
corporation's stock received in the exchange was $620,000.
Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.
b. What amount of gain or loss does Zhang recognize on the transfer of the property to the corporation?
Answer is complete but not entirely correct.
Gain or loss
recognized
$ (118,000)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F39080d99-57c8-4381-bd12-43141bbca0eb%2F5488ad77-2a86-4d3f-a698-4c81d5f9fcf2%2F50meisl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
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 values
and adjusted tax bases:
Inventory
Building
Land
Total
FMV
$ 36,000
270,000
414,000
Adjusted Tax
Basis
$ 18,000
180,000
540,000
$ 720,000
$ 738,000
The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the
corporation's stock received in the exchange was $620,000.
Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.
b. What amount of gain or loss does Zhang recognize on the transfer of the property to the corporation?
Answer is complete but not entirely correct.
Gain or loss
recognized
$ (118,000)
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