Ask Question
24 June, 10:41

Sandy transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Dolphin Corporation, for all of Dolphin's stock, worth $300,000, and a 10-year note. The note was executed by Dolphin and made payable to Sandy in the amount of $200,000. As a result of the transfer:A. Dolphin co-operation has a basis of $ 100,000 in the landB. Sandy recognized gain of $ 400,000

+4
Answers (1)
  1. 24 June, 13:41
    0
    B. Sandy recognized gain of $400,000.

    Explanation:

    Sandy transfers land of basis $100,000 to Dolphin Corporation. The land worth is $500,000 which is transferred to Dolphin Corporation in return for all the stocks worth $300,000 and note was executed by Dolphin amounting $200,000. The total consideration of Dolphin Corporation amounts $500,000 which the worth of the land transferred by Sandy. The basis of Land was $100,000. Sandy can recognize a gain of $400,000.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Sandy transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Dolphin Corporation, for all of Dolphin's stock, ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers