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Bumek [7]
3 years ago
11

Casey transfers property with a tax basis of $2,000 and a fair market value of $5,000 to a corporation in exchange for stock wit

h a fair market value of $4,000 and $400 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $600 on the property transferred. Casey also incurred selling expenses of $300. What is the amount realized by Casey in the exchange?
Business
1 answer:
lidiya [134]3 years ago
5 0

Answer:

The amount realized by Casey in the exchange $ 4700

Explanation:

Fair market value of stock received = $4000

Add: cash in transaction that qualifies for deferral under section 351 = $400

Add: assumed mortagae = $600

Less: selling expense = $(300)

Amount realized by casey in exchange  = 4000 + 400 + 600 - 300

= $ 4700

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