What is zhangs tax basis in the stock she receives

Reference no: EM133416821

Case: 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 value and adjusted basis.

FMV Adjusted Basis

                        Inventory              $    20,000                  $ 12,000
                        Building                   150,000                   100,000
                        Land                        230,000                   300,000
                        Total                      $ 400,000                $ 412,000

1) 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 $300,000. The transaction met the requirements to be tax-deferred under §351. What amount of gain or loss does Zhang recognize on the transfer of the property to her corporation?

2) Based upon the facts in the prior question, what is Zhang's tax basis in the stock she receives in the exchange?

3) What is the corporation's adjusted basis in the land received in the exchange?

Reference no: EM133416821

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