Dick, a cash basis taxpayer, incorporates his sole proprietorship. He transfers the following items to newly created Orange Corporation. $\begin{array}{l}
\begin{array}{lll}
&&\text { Fair Market }\
&\text { Adjusted Basis }&\text {Value }\
\text { Cash } & \$ 10,000 & \$ 10,000 \
\text { Buil ding } & 120,000 & 175,000 \
\text { Mortgage payable (secured by the building and held } & 135,000 & 135,000
\end{array}\
\text { for } 15 \text { vears) }
\end{array}$ ? With respect to this transaction:

Question

Quizplus · Accepted Answer

Dick has a recognized gain of $5,000 because the fair market value of the building ($175,000) exceeds his adjusted basis in the building ($120,000).

Dick, a Cash Basis Taxpayer, Incorporates His Sole Proprietorship ? with Respect to This Transaction: A)Orange Corporation's Basis in Transfers

Dick, a Cash Basis Taxpayer, Incorporates His Sole Proprietorship ? with Respect to This Transaction:
A)Orange Corporation's Basis in Transfers