What is the total gain recognized by allen on the exchange

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Reference no: EM132725188

Allen transferred 3 assets to a newly formed corporation in exchange for 100 share of voting common stock plus cash. The assets transferred were as follows:

Asset I real estate held for 2 years, FMV $22,000, adjusting basis of $40,000.
Asset II real estate held for 6 months, FMV $33,000, adjusting basis of $20,000.
Asset III depreciable property (§1245) FMV $55,000, adjusted basis of $25,000.
Cash received $10,000
Stock received: 100 shares of voting common, FMV = $100,000

Problem 1: What is the total gain recognized by Allen on the exchange?

A. $10,000
B. $25,000
C. $15,000
D. $8,000

Problem 2: What is Allen's basis in the stock received on the exchange?

A. $83,000
B. $85,000
C. $100,000
D. $90,000

Problem 3: What is corporation's total basis in the assets received from Allen?

A. $83,000
B. $85,000
C. $95,000
D. None of the above.

Reference no: EM132725188

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