Question
Benny receives 40 shares of Cougar Corporation Stock with a fair value of $540,000 plus $60,000 cash in exchange for his transfer of inventory, a
Benny receives 40 shares of Cougar Corporation Stock with a fair value of $540,000 plus $60,000 cash in exchange for his transfer of inventory, a building, and land to Cougar. Assume the rules of 351 were met and all property is free of liabilities. The property transferred to the corporation had the following fair market value and adjusted bases:
| FMV | ADJ. TAX BASIS | GAIN REALIZED | |
| INVENTORY | $70,000 | $65,000 | $5,000 |
| BUILDING | $380,000 | $330,000 | $50,000 |
| LAND | $150,000 | $105,000 | $45,000 |
| TOTAL | $600,000 | $500,000 | $100,000 |
1. What is Bennys recognized gain on this transfer?
2. What is Bennys adjusted tax basis in the Cougar Stock after the transfer? Show your calculations!
3. What is Bennys adjusted tax basis in the land after the transfer?
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Auditing Cloud Computing A Security And Privacy Guide
Authors: Ben Halpert
1st Edition
0470874740, 978-0470874745
