Question
Rick transferred the following assets and liabilities to Walkin' D Corporation. Adjusted Basis Fair Market Value Secure farmland $210,000 $225,000 Zombie killing equipment 45,000 75,000
Rick transferred the following assets and liabilities to Walkin' D Corporation.
| AdjustedBasis | FairMarket Value | |
| Secure farmland | $210,000 | $225,000 |
| Zombie killing equipment | 45,000 | 75,000 |
| Escape vehicles | 15,000 | 30,000 |
| Mortgage (held for four years) on land | 30,000 | 30,000 |
In return, Rick received $75,000 in cash plus 90% of Walkins only class of stock outstanding (fair market value of $225,000).
| a. | Rick has a recognized gain of $60,000. |
| b. | Rick has a recognized gain of $75,000. |
| c. | Ricks basis in the stock of Walkin' is $270,000. |
| d. | Warlkin' has the same basis in the assets received as Rick does in the stock. |
| e. | None of the above. |
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Human Resource Management
Authors: Robert L. Mathis, John H. Jackson
13th Edition
053845315X, 978-0538453158
