Keegan incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and tax bases. $$\begin{array} { | l | r | r | }
\hline & \text { FMV } & \text { Tax Basis } \
\hline \text { Inventory } & \$ 20,000 & \$ 14,000 \
\hline \text { Building } & 70,000 & 50,000 \
\hline \text { Land } & 150,000 & 100,000 \
\hline \text { Total } & \$ 240,000 & \$ 164,000 \
\hline
\end{array}$$ The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Keegan.
What amount of gain or loss does Keegan realize on the transfer of the property to his corporation?

Question

Keegan incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and tax bases. $$\begin{array} { | l | r | r | } 
\hline & \text { FMV } & \text { Tax Basis } \
\hline \text { Inventory } & \$ 20,000 & \$ 14,000 \
\hline \text { Building } & 70,000 & 50,000 \
\hline \text { Land } & 150,000 & 100,000 \
\hline \text { Total } & \$ 240,000 & \$ 164,000 \
\hline
\end{array}$$ The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Keegan.
What amount of gain or loss does Keegan realize on the transfer of the property to his corporation?

Quizplus · Accepted Answer

The Answer of Keegan incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and tax bases. $$\begin{array} { | l | r | r | } 
\hline & \text { FMV } & \text { Tax Basis } \
\hline \text { Inventory } & \$ 20,000 & \$ 14,000 \
\hline \text { Building } & 70,000 & 50,000 \
\hline \text { Land } & 150,000 & 100,000 \
\hline \text { Total } & \$ 240,000 & \$ 164,000 \
\hline
\end{array}$$ The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Keegan.
What amount of gain or loss does Keegan realize on the transfer of the property to his corporation?

Keegan Incorporated His Sole Proprietorship by Transferring Inventory, a Building