e. None of the above 26. Eleen transfers property wortlh $200,000 (basis of $60,
ID: 2556770 • Letter: E
Question
e. None of the above 26. Eleen transfers property wortlh $200,000 (basis of $60,000) to Goldfinch Corporation In returs, she receives 80% of the stock in Goldfinch Corporation (fair market value of $180,000) and a long-temm note (fair market value of $20,000) executed by Goldfinch and made payable to Eileen. Eileen recognines pain on the transfer of b. $20,000 c. $60,000 d $140,000 e None of the above. Gabriella transfers cash of 550,000 for 50 shares of stock 27. Gabriella and Jusnita form Luster Coeporation while Juanita tramsfers a secret process (basis of nero and fair market value of S50,000) for 50 shares of stock a. The transfers to Luster are fully taxable to both Gabeiella and Juanita. b. Juanita must recognize gain of $50,000 c Because Juanta is neqaired to necognize gain on the transfer, Gabriella also must d. Neither Gabriella nor Juanita will recognize gain on the transfer e None of the above 28. Ams, Irene, and BRob incorporate their respective businesses and form Dove Corporation. Anm exchanges 0 and fair market value of $400,000) for 200 shares in Dove Corporation om on Apeil 10, 2008. Bob transfers his property (basis of $250,000 and fair her property Chasis of $100,00 March 3, 2008. Irene eschanges her property (basis of $140,000 and fair market value of S600,000) for 300 shares in Dove Corpoeation arker vale of $1,000000) for $00 shares in Dove Corporation on May 17, 2010. Bob's transfer is not purt ofa proamanged plan with Ann and trene to incorporate their businesses. What gain, if any, will Bob a $1,000.000 h 5750,000 None of the above $250,000 ldsc asis taypuyer, incorporates his sole proprietorship. He transfers the following items to newly created Robia Corporation Adjusted Basis S 10,000 100,000 Fair Market S 10,000 160,000 120,000 Cash Mortgage payable (secured by the building and held for 5 years) 20,000 With respect to this transaction a Robin Corporation's basis in the building is $100,000. b. Ronald has no recognized gain. Ronald has a recognized gain of $20,000. Ronald has a recognized gain of $10,000 c. dExplanation / Answer
26. Eileen recognizes gain on the transfer of $20,000
Explanation: Here the long-term obligation of Goldfinch Corporation constitutes boot. So, Eileen receives boot in the amount of $20,000 and will recognize gain to that extent only.
27. In the given situation Neither Gabriella nor Juanita will recognize gain on the transfer.
28. The gain if any, will Bob recognize on the transfer is $750,000.
Explanation: The exchange is taxable because Bob did not hold 80% control in Dove after the transfer.
29. With respect to this transaction Ronald has a recognized gain of $10,000.
Explanation: Under 357(c), Here Ronald recognizes gain to the extent of liabilities (mortgage payable of $120,000) exceed the basis of all assets transferred (building)+ (cash). Robin Corporations basis in the building is $110,000 [$100,000 (Ronalds basis) + $10,000 (gain recognized by Ronald).
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