Eileen transfers property worth $200,000 (basis of $190,000) to Goldfinch Corporation. In return, she receives 80% of the stock in Goldfinch Corporation (fair market value of $180,000) and a long-term note (fair market value of $20,000) executed by Goldfinch and made payable to Eileen. Eileen recognizes gain on the transfer of:

Eileen recognizes gain on the transfer is $10000

Explanation:

given data

transfers property = $200,000

basis = $190,000

return = 80%

fair market value = $180,000

long term fair market value = $20,000

to find out

Eileen recognizes gain on the transfer

solution

we can say here that Eileen recognizes gain on the transfer is $10000

because Eileen received is property worth - basis = $200,000 - $190,000 = $10000

and no gain no loss is recognized for contribution of getting interest in company so here

gain in boot amount is $10000

so that Eileen recognizes gain on the transfer is $10000