Recognized gains or losses


A transfers machines valued at $170,000 (basis = $150,000) along with $30,000 cash to AB Corporation and B transfers real property valued at $320,000 (basis = $310,000) to the corporation. A receives 40 percent of the outstanding stock and B receives 60 percent. B also receives $20,000 from the corporation. What are A's and B's recognized gains or losses, respectively, on these transfers?

a) $20,000, 0

b) 0, $20,000

c) 0, $10,000

d) 0, 0

e) None of the above

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Accounting Basics: Recognized gains or losses
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