ack contributes the following to ABC corporation in a §351 exchange: (1) real property with a...
ack contributes the following to ABC corporation in a §351 exchange: (1) real property with a basis of 400,000 and a fair market value of $800,000, with a $200,000 mortgage attached to it and (2) a personal loan for $20,000. How much income does Jack recognize on the transaction?
A. $0
B. $20,000
C. $220,000
D. $400,000
Homework Answers
The correct answer to this will D. 400000. Because the real property value was $400,000 and $200,000 was the mortgage amount which is included in the value of property. personal loan will not be considered for this, as it is not related to property. Since , the fair market value is $800,000. Hence = $8,00,000-400,000 = $400,000.
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