68 Carl transfers land to Cardinal Corporation for 90% of the note payable to Carl in the amount of $40,000 and the assumption by Cardina land in the amount of $100,000. The land, which has a basis to a. Carl will have a recognized gain on the transfer of $90,000 b. Carl will have a recognized gain on the transfer of $30,000 C. Cardinal Corporation will have a basis of $70,000 in the land transferred by Carl d. Cardinal Corporation will have a basis of $160,000 in the land transferred by Carl e. None of these. ration for 90% of the stock in Cardinal Corporation worth $20,000 plus $100,000. The land, which has a basis to Carl of $70,000, is worth $160,000, ption by Cardinal Corporation of a mortgage on the sfer of $90,000 160,000-70,000 = 10,000 99,000-20,00070, laden) each entity not sure 32. Why is the shareholder's basis in the new stock received in a corporate reorganization the value of the stock received less the postponed gain? a. This ensures that the basis is the value of the stock given up in the reorganization. b. The realized gain is the amount that would be recognized if the stock was sold outright. This gain may not be recognized, however, unless there is boot. c. The basis is the vehicle to ensure that the gain postponed will be recognized for the future when the stock is sold. d. A carryover basis or a substituted basis will not include the postponed gain that is necessary in a tax- deferred transaction such as a reorganization. e. All the above statements are true. 35) Penguin Corporation purchased bonds (basis of $190,000) of its 100% owned subsidiary, Finch Corporation, at a discount Pursuant to a $ 332 liquidation and in satisfaction of the indebtedness, Finch distributes land worth $200,000 (basis of $160,000) to Penguin. Which of the following statements is correct with respect to the distribution of land? a. Neither Finch nor Penguin recognize gain (or loss). b. Finch recognizes no gain and Penguin recognizes a gain of $10,000. c. Finch recognizes a gain of $40,000 and Penguin recognizes no gain. d. Finch recognizes a gain of $40,000 and Penguin recognizes a gain of $10,000. e. None of these