Question

asey transfers property with a tax basis of $2,640 and a fair market value of $7,000 to a corporation in exchange for stock with a fair market value of $5,100 and $835 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $1,065 on the property transferred. Casey also incurred selling expenses of $547. What is the amount realized by Casey in the exchange

Answer 1

Amount realized $6,453

Step-by-step explanation:

The computation of the amount realized by Casey in the exchange is shown below:

Fair market value of the stock received $5,100

add: cash in transaction that qualifies for deferral under section 351 $835

Add: assumed mortgage $1,065

Less: selling expense -$547

Amount realized $6,453