Keegan Incorporated His Sole Proprietorship by Transferring Inventory, a Building

Keegan incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and tax bases. $$\begin{array} { | l | r | r | } \hline & \text { FMV } & \text { Tax Basis } \\\hline \text { Inventory } & \$ 20,000 & \$ 14,000 \\\hline \text { Building } & 70,000 & 50,000 \\\hline \text { Land } & 150,000 & 100,000 \\\hline \text { Total } & \$ 240,000 & \$ 164,000 \\\hline\end{array}$$ The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Keegan.
What amount of gain or loss does Keegan realize on the transfer of the property to his corporation?

Correct Answer:

Verified

Gain reali...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

View Full Answer For Free