Question

amy transfers property with a tax basis of $900 and a fair market value of $600 to a corporation in exchange for stock with a fair market value of $450 in a transaction that qualifies for deferral under section 351. the corporation assumed a liability of $150 on the property transferred. what is amy's tax basis in the stock received in the exchange?

Answer 1

Amy's tax basis in the stock received in the exchange would be $300.

Step-by-step explanation:

Amy's tax basis in the stock received in the exchange would be determined by subtracting the assumed liability from the fair market value of the stock received.

In this case, Amy received stock with a fair market value of $450 and the corporation assumed a liability of $150. Therefore, Amy's tax basis in the stock would be $450 - $150 = $300.