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-adjusted bases.
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.
Assuming the gain or loss realized in Problem 1 is deferred under §351, what is Keegan's basis in the stock he receives in 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-adjusted bases.  
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.
Assuming the gain or loss realized in Problem 1 is deferred under §351, what is Keegan's basis in the stock he receives in 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-adjusted bases.  
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.
Assuming the gain or loss realized in Problem 1 is deferred under §351, what is Keegan's basis in the stock he receives in his corporation?

Keegan Incorporated His Sole Proprietorship by Transferring Inventory, a Building