Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. roland owns 75% of the stock of dark tower corp wo

Roland owns 75% of the stock of Dark Tower Corp worth $337500 and Jake owns...

50.1K

Verified Solution

Question

Accounting

Roland owns 75% of the stock of Dark Tower Corp worth $337500 and Jake owns the remaining 25% of the stock (formed 5 years ago). On October 1, Roland transfers land with a basis of $110000 and a FMV of $150000 in exchange for stock in Dark Tower Corp worth $130000 and a $20000 note and Jakes brother transfers $5000 cash in exchange for $5000 worth of stock. Choose the correct answer.
a. Roland realizes $40000 of gain and recognizes $40000 of gain on the transfer
b. Roland realizes $40000 of gain and recognizes $20000 of gain on the transfer
c. Roland realizes $40000 of gain and recognizes $0 of gain on the transfer
d. Roland realizes $20000 of gain and recognizes $0 of gain on the transfer
e. Roland realizes $20000 of gain and recognizes $20000 of gain on the transfer

Answer & Explanation Solved by verified expert
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!
Become a Member

Other questions asked by students