Which of the is correct regarding the transfer

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Question - Amelia, a Cash Basis Taxpayer, incorporates her Sole Proprietorship in 2019. She transfers the following items to the newly created Leggett Corporation: Cash-$40,000 (Adjusted Basis); $40,000 (Fair Market Value); Land- $280,000(Adjusted Basis); $280,000 (Fair Market Value); Mortgage Payable- $330,000 (Adjusted Basis); $330,000 (Fair Market Value). Amelia received only stock for the transfer of the assets to the newly created corporation. Which of the following is correct regarding the transfer?

1. Amelia has Recognized Gain of $10,000

2. Leggett Corporation's basis in the Land is $280,000

3. Amelia has no Recognized Gain or Recognized Loss

4. Amelia has Recognized Gain of $50,000

Reference no: EM132635573

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