You transfer property with an adjusted basis of $20,000 and a fair market value of...
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Accounting
You transfer property with an adjusted basis of $20,000 and a fair market value of $31,000 in exchange for 100% of the stock in a new corporation. You receive 100 shares of stock having a fair market value of $16,000 and $10,000 in cash. The corporation also assumes a $5,000 mortgage on the property. Which of the following is correct?
$10,000 gain realized; $5,000 recognized.
$11,000 gain realized; $10,000 recognized.
$15,000 gain realized; $11,000 recognized.
$11,000 gain realized; $0 recognized.
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