McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 7

Zhang incorporated her 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-adjusted bases. The corporation also assumed a mortgage of $100,000 attached to the building and land.The fair market value of the corporation's stock received in the exchange was $300,000.The transaction met the requirements to be tax-deferred under §351.a.What amount of gain or loss does Zhang realize on the transfer of the property to her corporation?
b.What amount of gain or loss does Zhang recognize on the transfer of the property to her corporation?
c.What is Zhang's tax basis in the stock she receives in the exchange?
d.What is the corporation's tax-adjusted basis in each of the assets received in the exchange?
e.How much, if any, gain or loss does Zhang recognize on the exchange assuming the revised facts?
f.What is Zhang's tax basis in the stock she receives in the exchange?
g.What is the corporation's tax-adjusted basis in each of the assets received in the exchange?