Question

For Bona Dude Business Purposes Dave Transferred The Following Property To X Corp., And X Assumed ... Question: For bona dude business purposes Dave transferred the following property to X Corp., and X assumed... For bona dude business purposes Dave transferred the following property to X Corp., and X assumed the &50,000 mortgage Building and land. Asset basis $120,000 Mortgage $50000 Fair market value $160000 Various equipment 60000. FMV 40000 In exchange Dave received 100% of Xs only class of stock. What is Xs basis in the property received after the exchange

Answer 1

Calculation of X’s basis in the property after the corporation received these assets in exchange.

Details	($)	($)
Fair market value of building and land	160,000.00
Less: Mortgage value on the building	50,000.00
Building basis		110,000.00
Add: Equipment fair market value		40,000.00
X's basis in the property		150,000.00

It is important to note that the fair market values of the properties have to be taken into consideration for determination of X’s basis in the property. The amount of mortgage on the building and land has been deducted to arrive at the net basis on the property.