US tax laws

Problem Materials 19-27 Transfer of Liabilities. Each of the transfers below qualifies as a 351 transac- tion, and in each case the transferee corporation assumes liabilities involved in the transfer. For each transfer, compute the transferor shareholder's recognized gain, the transferor's basis in any stock or securities received, and the transferee corporation's basis in any property received. a. T transfers land with a basis of $60,000 and subject to a mortgage of $20,000 in exchange for stock worth $55,000. b. A transfers machinery with a basis of $4,000 and subject to a mortgage of $9,000 in exchange for stock worth $6,000. The $9,000 mortgage was created two weeks before the transfer and A used the loan proceeds to take her husband on a vacation trip to Europe. Assume the same facts in (b) except that the $9,000 liability is the balance re- maining on a five-year $40,000 mortgage loan created to acquire the machinery transferred by A. X transfers equipment with a basis of $30,000 and subject to a liability of $10,000 in exchange for stock worth $80,000 and a $20,000 security (bond) maturing in 10 years and paying 15% interest annually. Problem Materials 19-27 Transfer of Liabilities. Each of the transfers below qualifies as a 351 transac- tion, and in each case the transferee corporation assumes liabilities involved in the transfer. For each transfer, compute the transferor shareholder's recognized gain, the transferor's basis in any stock or securities received, and the transferee corporation's basis in any property received. a. T transfers land with a basis of $60,000 and subject to a mortgage of $20,000 in exchange for stock worth $55,000. b. A transfers machinery with a basis of $4,000 and subject to a mortgage of $9,000 in exchange for stock worth $6,000. The $9,000 mortgage was created two weeks before the transfer and A used the loan proceeds to take her husband on a vacation trip to Europe. Assume the same facts in (b) except that the $9,000 liability is the balance re- maining on a five-year $40,000 mortgage loan created to acquire the machinery transferred by A. X transfers equipment with a basis of $30,000 and subject to a liability of $10,000 in exchange for stock worth $80,000 and a $20,000 security (bond) maturing in 10 years and paying 15% interest annually