Question

68 Carl transfers land to Cardinal Corporation for 90% of the note payable to Carl in the amount of $40,000 and the assumption by Cardina land in the amount of $100,000. The land, which has a basis to a. Carl will have a recognized gain on the transfer of $90,000 b. Carl will have a recognized gain on the transfer of $30,000 C. Cardinal Corporation will have a basis of $70,000 in the land transferred by Carl d. Cardinal Corporation will have a basis of $160,000 in the land transferred by Carl e. None of these. ration for 90% of the stock in Cardinal Corporation worth $20,000 plus $100,000. The land, which has a basis to Carl of $70,000, is worth $160,000, ption by Cardinal Corporation of a mortgage on the sfer of $90,000 160,000-70,000 = 10,000 99,000-20,00070, laden) each entity

Answer 1

Answer 28.

Option e is correct None of these.

Correct amount will be the basis in land will be 140000

Basis in land (given) = 70000 plus, gain of 70000 (gain = note amount of 40000 + (mortgage of 100000 - land basis of 70000))

= 70000 + (40000 + (100000-70000))

= 70000 + 70000

= 140,000

Answer 28.

Option c is correct

Because gain is not recognized right now and it will be in future when the stock will be sold.

Answer 29.

Option b is correct

Finch no gain And Penguin gain = 10,000

Penguin recognizes a gain = 10,000 [200,000 (value of land) - 190,000 (basis in bonds)].

Finch recognizes no gain or loss due to a § 332 liquidation