Property based on property exchanges


Ava, Irene, and Bob incorporate their respective businesses and form Dove Corporation. Ava exchanges her property (basis of $100,000 and fair market value of $400,000) for 200 shares in Dove Corporation. Irene exchanges her property (basis of $140,000 and fair market value of $600,000) for 300 shares in Dove Corporation. Bob transfers his property (basis of $250,000 and fair market value of $1,000,000) for 500 shares in Dove Corporation. Bob's transfer is not part of a prearranged plan with Ava and Irene to incorporate their businesses. What gain, if any, will Bob recognize on the transfer?

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Accounting Basics: Property based on property exchanges
Reference No:- TGS062479

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