Tara transfers land with a $690,000 adjusted basis and a $700,000 FMV to a corporation in a Sec.351 transfer.Immediately after the transfer,Tara owns 100% of the corporation-stock with a FMV of $615,000.In addition,$85,000 of liabilities are assumed by the corporation with respect to the transfer.No other property is transferred.Tara's recognized gain on the transfer is

Question

Quizplus · Accepted Answer

Under Section 351, no gain or loss is recognized if property is transferred to a corporation solely in exchange for stock and the transferor is in control of the corporation immediately after the exchange. Here, Tara owns 100% of the corporation after the transfer, and the liabilities assumed do not exceed the adjusted basis of the property transferred, so no gain is recognized.

Tara Transfers Land with a $690,000 Adjusted Basis and a $700,000