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Mr. Carroll transferred the title of a condo he owned in Mexico to his 100%-owned accounting corporation in exchange for stock worth $5,000. Carroll used

Mr. Carroll transferred the title of a condo he owned in Mexico to his 100%-owned accounting corporation in exchange for stock worth $5,000. Carroll used the condo for personal purposes, and he had no bona fide business reason for the transfer. At the time of the transfer, the condo had a fair market value of $170,000, an adjusted basis of $160,000, and a mortgage of $165,000 (which was assumed by the corporation). What is the amount of Mr. Carroll's recognized gain?

  • A.
  • $165,000
  • B.
  • $10,000
  • C.
  • $5,000
  • D.
  • $0

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