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?

Answer 1

$500

Step-by-step explanation:

Data given in the question

Tax basis = $400

Fair market value = $500

Under section 351, the fair market value = $350

Liability on the property transferred = $150

So, by considering the above information the amount realized in the exchange is

= Fair market value under section 351 + liability on the property transferred

= $350 + $150

= $500