Ask Question
28 February, 20:37

SYBIL transfers property with a tax basis of $5,000 and a fair market value of $6,000 to a corporation in exchange for stock with a fair market value of $3,000 and $2,000 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $1,000 on the property transferred. What is Sybil's tax basis in the stock received in the exchange? A. $6,000 B. $5,000 C. $4,000 D. $3,000 D. $3,000

+5
Answers (1)
  1. 28 February, 21:01
    0
    D. $3,000

    Explanation:

    The shareholder's tax basis =

    SYBIL tax basis in the property transferred + gain recognized - cash received of $2,000 - the liability assumed by the corporation.

    $5,000 + $1,000 - $2000 - $1,000 = $3,000.

    If Sybil sells the stock for $3,000, no gain or loss will be recognized, an amount equal to the gain deferred of $0.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “SYBIL transfers property with a tax basis of $5,000 and a fair market value of $6,000 to a corporation in exchange for stock with a fair ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers