Eileen transfers property worth $200,000,basis of $60,000,to Goldfinch Corporation.In return,she receives 80% of the stock in Goldfinch Corporation worth $180,000,and a long-term note,executed by Goldfinch and made payable to Eileen,worth $20,000.Eileen will recognize no gain on the transfer.

Question

Quizplus · Accepted Answer

The long-term obligation of Goldfinch Corporation constitutes boot.Thus,Eileen has boot in the amount of $20,000 and will recognize gain to that extent.

Eileen Transfers Property Worth $200,000,basis of $60,000,to Goldfinch Corporation