Answered

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Carlos transfers property with a tax basis of $750 and a fair market value of $1,200 to a corporation in exchange for stock with a fair market value of $975 and $75 cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $150 on the property transferred. What is the corporation's tax basis in the property received in the exchange

Sagot :

hyderali230

Answer:

$975

Explanation:

Use the following formula to calculate the Corporation's Tax basis in the property received in exchange

Corporation's Tax basis = Tax basis of Property transferred + Gain recognized

Where

Tax basis of Property transferred = $750

Gain recognized = 975 - $750 = $225

Placing values in the formula

Corporation's Tax basis = $750 + $225

Corporation's Tax basis = $975

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