Question
Victoria and Matthew organize Tax Corp, which issues common stock with a fair market value of $120,000. Victoria contributes a building with a basis of
Victoria and Matthew organize Tax Corp, which issues common stock with a fair market
value of $120,000. Victoria contributes a building with a basis of $40,000 and a fair market
value of $80,000 in exchange for 60 percent of the stock. The building was subject to a $10,000
mortgage assumed by Tax Corp. What amount of gain does Victoria recognize on the exchange?
A. $0
B. $10,000
C. $40,000
D. $30,000
E. None of the above
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Financial and Managerial Accounting
Authors: Horngren, Harrison, Oliver
3rd Edition
978-0132497992, 132913771, 132497972, 132497999, 9780132913775, 978-0132497978
