T11F-Chp-13-5C-Transfer Assets to Corp-Worksheet -...

Tab:Problem File: b284caa2b2b5df3f35936896927da2bb94232f01.xls Page 1 of 2
Transfer to Controlled Corporation
Jon transfers land, a capital asset to Dee Corp.
in exchange for all its stock. (New Corporation)
The land had an adjusted basis to Jon of $50,000
The land had a FMV of 100,000
First assume the land is debt-free.
What is gain realized? Recognized? Stock Basis?
Sec. 61 and 1001. Sec. 351(a). Sec. 358(a)(1). Sec. 362.
Now use following (added) info & complete worksheet.
Dee Corp. assumes the mortgage on the land 40,000
Jon receives stock worth 60,000
Transfer of Property to Corp. for Stock
1 Compute gain or loss to stockholder §351(b)
Value of all consideration received by stockholder:
Dee Stock
Mortgage assumed by the Corporation
Minus: Basis of all property transferred to corp.
Land
Gain Realized
Gain Recognized: Lesser of gain realized or
boot received (include excess debt) §357(c)
2 Compute basis of stock to stockholder §358
Basis of property invested§358(a)(1)
Plus: Gain recognized §358(a)(1)(B)
Minus: Boot received
(include all liabilities transferred) §358(d)