Question

ROBERTA transfers property with a tax basis of $400 and a fair market value of $500 to a corporation in exchange for stock with a fair market value of $350 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $150 on the property transferred. What is the amount realized by Roberta in the exchange? A. $500 B. $400 C. $350 D. $250

Answer 1

correct option is A. $500

Step-by-step explanation:

given data

tax basis = $400

fair market value = $500

fair market value = $350

liability = $150

solution

we get here amount realized by Roberta in the exchange that is express as

= fair market value of the stock receive + from the liability ...................1

amount realized = $350 + $150

amount realized = $500

so correct option is A. $500