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Casey transfers property with a tax basis of $2,500 and a fair market value of $5,400...

Casey transfers property with a tax basis of $2,500 and a fair market value of $5,400 to a corporation in exchange for stock with a fair market value of $4,300 and $475 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $625 on the property transferred. Casey also incurred selling expenses of $302. What is the amount realized by Casey in the exchange?

Multiple Choice

  • $4,523

  • $5,098

  • $5,400

  • $4,998

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Answer #1

The amount realized by Casey = fair market value of stock received + cash received + liability assumed by the corporation - selling expenses

=4300+475+625-302

=5098

The answer is b) 5098

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