Camille transfers property with a tax basis of $800 and a fair market value of $1,200 to a corporation in exchange for stock with a fair market value of $850 and $350 in cash in a transaction that qualifies for deferral under section 351. Camille also incurred selling expenses of $100. What is the amount realized by Camille in the exchange?
A)$1,200
B)$1,100
C)$850
D)$750

Question

Quizplus · Accepted Answer

The amount realized is the fair market value of the property received plus any cash received and selling expenses incurred, which is $1,200 + $350 - $100 = $1,450. However, since the transaction qualifies for deferral under section 351, Camille does not recognize any gain or loss on the transfer. Therefore, the amount realized is not relevant for tax purposes in this case.

Camille Transfers Property with a Tax Basis of $800 and a Fair