Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation...
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Accounting
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporations stock. The property transferred to the corporation had the following fair market values and adjusted bases:
FMV
Adjusted Basis
Inventory
$
52,000
$
26,000
Building
390,000
260,000
Land
598,000
780,000
Total
$
1,040,000
$
1,066,000
The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporations stock received in the exchange was $940,000. The transaction met the requirements to be tax-deferred under 351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
c. What is Zhangs tax basis in the stock she receives in the exchange?
Assume the corporation assumed a mortgage of $1,140,000 attached to the building and land. Assume the fair market value of the building is now $650,000 and the fair market value of the land is $1,378,000. The fair market value of the stock remains $940,000.
g. What is the corporations adjusted basis in each of the assets received in the exchange?
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