Required information [The following information applies to the questions displayed below.] Zhang incorporated her 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 adjusted tax bases: FMV Adjusted Tax Basis Inventory Building Land $ 60,000 450,000 690,000 $ 30,000 300,000 900,000 $ 1,200,000 Total $ 1,230,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $1,100,000. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. c. What is Zhang's tax basis in the stock received in the exchange? Tax basis
Required information [The following information applies to the questions displayed below.] Zhang incorporated her 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 adjusted tax bases: FMV Adjusted Tax Basis Inventory Building Land $ 60,000 450,000 690,000 $ 30,000 300,000 900,000 $ 1,200,000 Total $ 1,230,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $1,100,000. Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable. c. What is Zhang's tax basis in the stock received in the exchange? Tax basis
Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 84P
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Question
A6
![Required information
[The following information applies to the questions displayed below.]
Zhang incorporated her 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 adjusted tax bases:
FMV
Adjusted Tax
Basis
Inventory
Building
Land
$ 60,000
450,000
690,000
$ 30,000
300,000
900,000
$ 1,200,000
Total
$ 1,230,000
The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the
corporation's stock received in the exchange was $1,100,000.
Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.
c. What is Zhang's tax basis in the stock received in the exchange?
Tax basis](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F53ed963b-3a05-4f10-9db6-21691093c993%2Ff6d619b9-1282-4155-a38f-31364fd24458%2Fq7e1h6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Zhang incorporated her 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 adjusted tax bases:
FMV
Adjusted Tax
Basis
Inventory
Building
Land
$ 60,000
450,000
690,000
$ 30,000
300,000
900,000
$ 1,200,000
Total
$ 1,230,000
The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the
corporation's stock received in the exchange was $1,100,000.
Note: Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.
c. What is Zhang's tax basis in the stock received in the exchange?
Tax basis
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