FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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[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
Adjusted Tax
Basis
$ 34,000
340,000
1,020,000
FMV
$ 68,000
510,000
782,000
$ 1,360,000
$ 1,394,000
Total
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 $1,260,000. The transaction met the requirements to be tax-deferred
under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
Problem 08-40 Part d (Algo)
d. What is the corporation's adjusted tax basis in each of the assets received in the exchange?
Adjusted basis
Land
$
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Transcribed Image Text:[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 Adjusted Tax Basis $ 34,000 340,000 1,020,000 FMV $ 68,000 510,000 782,000 $ 1,360,000 $ 1,394,000 Total 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 $1,260,000. The transaction met the requirements to be tax-deferred under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) Problem 08-40 Part d (Algo) d. What is the corporation's adjusted tax basis in each of the assets received in the exchange? Adjusted basis Land $
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