Bertam transfers property with a $50,000 mortgage, a fair market value of $350,000, and a basis of $200,000 for stock valued at $300,000. If the corporation assumes the mortgage, what is Bertram's basis in the stock received in this qualifying Section 351 transaction?

Question

Quizplus · Accepted Answer

In a Section 351 transaction, the basis of the stock received is the basis of the property transferred ($200,000) minus the mortgage assumed by the corporation ($50,000), resulting in a basis of $150,000.

Bertam Transfers Property with a $50,000 Mortgage, a Fair Market