Mitchell and Lane form Green Corporation. Mitchell transfers property (basis of $105,000 and fair market value of $90,000) while Lane transfers land (basis of $8,000 and fair market value of $75,000) and $15,000 of cash. Each receives 50% of Green Corporation's stock (total value of $180,000) . As a result of these transfers:
A) Mitchell has a recognized loss of $15,000, and Lane has a recognized gain of $67,000.
B) Neither Mitchell nor Lane has any recognized gain or loss.
C) Mitchell has no recognized loss, but Lane has a recognized gain of $15,000.
D) Green Corporation will have a basis in the land of $23,000.
E) None of the above.
Correct Answer:
Verified
Q41: Tara incorporates her sole proprietorship, transferring it
Q49: Ann transferred land worth $200,000, with a
Q51: Tom and George form Swan Corporation with
Q53: Rob and Sharon form Swallow Corporation with
Q53: Three individuals form Skylark Corporation with the
Q56: Sarah and Tony (mother and son) form
Q56: Amy owns 20% of the stock of
Q56: Paul,a cash basis taxpayer,incorporates his sole proprietorship.He
Q57: A shareholder lends money to his corporation
Q100: Eve transfers property (basis of $120,000 and
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents