Jeremy transfers Sec. 351 property acquired three years earlier having a $100,000 basis and a $160,000 FMV to Jeneva Corporation. Jeremy receives all 200 shares of Jeneva stock having a
$140,000 FMV, and a $20,000 90- day Jeneva note. What is Jeremy's recognized gain?

Question

Quizplus · Accepted Answer

Jeremy's recognized gain is the lesser of the boot received ($20,000 note) or the realized gain ($160,000 FMV - $100,000 basis = $60,000). Therefore, the recognized gain is $20,000.

Jeremy Transfers Sec