Martin operates a law practice as a sole proprietorship using the cash method of accounting.Martin incorporates the law practice and transfers the following items to a new,solely owned corporation. $$\begin{array} { | l | c | r | }
\hline & \text { Adjusted Basis } & \text { FMV } \
\hline \text { Cash } & \$ 10,000 & \$ 10,000 \
\text { Equipment } & 80,000 & 100,000 \
\text { Accounts receivable } & 0 & 120,000 \
\text { Accounts payable (deductible expenses) } & 0 & 60,000 \
\text { Note payable (on equipment) } & 50,000 & 50,000 \
\hline
\end{array}$$ Martin must recognize a gain of ________ and has a stock basis of ________:

Question

Martin operates a law practice as a sole proprietorship using the cash method of accounting.Martin incorporates the law practice and transfers the following items to a new,solely owned corporation. $$\begin{array} { | l | c | r | } 
\hline & \text { Adjusted Basis } & \text { FMV } \
\hline \text { Cash } & \$ 10,000 & \$ 10,000 \
\text { Equipment } & 80,000 & 100,000 \
\text { Accounts receivable } & 0 & 120,000 \
\text { Accounts payable (deductible expenses) } & 0 & 60,000 \
\text { Note payable (on equipment) } & 50,000 & 50,000 \
\hline
\end{array}$$ Martin must recognize a gain of ________ and has a stock basis of ________:

Quizplus · Accepted Answer

The Answer of Martin operates a law practice as a sole proprietorship using the cash method of accounting.Martin incorporates the law practice and transfers the following items to a new,solely owned corporation. $$\begin{array} { | l | c | r | } 
\hline & \text { Adjusted Basis } & \text { FMV } \
\hline \text { Cash } & \$ 10,000 & \$ 10,000 \
\text { Equipment } & 80,000 & 100,000 \
\text { Accounts receivable } & 0 & 120,000 \
\text { Accounts payable (deductible expenses) } & 0 & 60,000 \
\text { Note payable (on equipment) } & 50,000 & 50,000 \
\hline
\end{array}$$ Martin must recognize a gain of ________ and has a stock basis of ________:

Martin Operates a Law Practice as a Sole Proprietorship Using