If W has land worth $200 with an adjusted basis of $60 and transfers it to Zee Corp for 100% of the stock, what is W’s basis in the stock?
Suppose the land in the prior question was subject to a mortgage of $25. What is W’s basis in the stock?
Assume there is no mortgage on the land, market value is $200 and the basis of the land is $60.. The corporation borrows $5 from a bank and gives the $5 to W along with 100% of the stock in exchange for the land.
What is the fair market value of the stock? (Think of the balance sheet, what are the assets and the liabilities?)
What is the amount realized? What are the components of the amount realized?
What is the gain realized?
What is the gain recognized?