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What amount of gain or loss does Carla recognize

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Question - 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 bases:

FMV

Adjusted Basis

Inventory

$35,750

$10,100

Building

153,000

106,500

Land

291,750

375,000

Total

$480,500

$491,600

The corporation also assumed a mortgage of $159,750 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $320,750.

Required -

a. What amount of gain or loss does Carla realize on the transfer of the property to the corporation?

b. What amount of gain or loss does Carla recognize on the transfer of the property to the corporation?

c. What is Carla's basis in the stock she receives in her corporation?

Reference no: EM132449564

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