Question
Johanne transferred investment property to S&J Corporation in exchange for 60 percent of the S&J Corporation stock (30 shares valued at $96,000). The property's fair
Johanne transferred investment property to S&J Corporation in exchange for 60 percent of the S&J Corporation stock (30 shares valued at $96,000). The property's fair market value was $184,000 and its adjusted basis to Johanne was $80,450. The investment property was subject to a $88,000 mortgage that S&J Corporation assumed on the transfer (not treated as boot). (Leave no answer blank. Enter zero if applicable.) A. Assuming the transfer qualifies under 351, what is the amount and character of the gain Johanne must recognize on the exchange? B.What is Johanne's adjusted basis in the S&J stock he received in the exchange?
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