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Apricot, a cash basis taxpayer, incorporates her sole proprietorship. She transfers the following items to newly created Strawberry Corporation. Adjusted Basis Fair Market Value Cash
Apricot, a cash basis taxpayer, incorporates her sole proprietorship. She transfers the following items to newly created Strawberry Corporation.
| Adjusted Basis | Fair Market Value | |
| Cash | $10,000 | $10,000 |
| Building | 120,000 | 175,000 |
| Mortgage payable (secured by the building and held for 15 years) | 135,000 | 135,000 |
- How much gain must Apricot recognize?
- What is Apricot's basis in the stock she receives?
- What is Strawberry Corporation's basis in the building?
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Auditing Derivative Strategies
Authors: Barbara Davison
1st Edition
0894134434, 978-0894134432
