Derrek transfers land and equipment adjusted bases of $350,000 and $50,000, respectively, to a newly...
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Accounting
Derrek transfers land and equipment adjusted bases of $350,000 and $50,000, respectively, to a newly formed corporation in exchange for 100% of the stock. The corporation assumes a $500,000 liability on the transferred land. Determine (1) stock basis in Derreks hands and (2) the amount of gain Derrek recognizes from the exchange.
$400,000 and $0
$0 and $100,000
$0 and $400,000
$500,000 and $0
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