Rick transferred the following assets and liabilities to Warbler Corporation. ...
90.2K
Verified Solution
Link Copied!
Question
Accounting
Rick transferred the following assets and liabilities to Warbler Corporation.
| Adjusted Basis | Fair Market Value | |
| Building | $210,000 | $225,000 |
| Equipment | 45,000 | 75,000 |
| Trucks | 15,000 | 30,000 |
| Mortgage (held for four years) on building | 30,000 | 30,000 |
In return, Rick received $75,000 in cash plus 90% of Warbler Corporation's only class of stock outstanding (fair market value of $225,000).
a.Rick's basis in the stock of Warbler Corporation is $270,000.
b.Rick has a recognized gain of $75,000.
c.Rick has a recognized gain of $60,000.
d.Warbler Corporation has the same basis in the assets received as Rick does in the stock.
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.