Question

Casey transfers property with a tax basis of $3,800 and a fair market value of $6,800 to a corporation in exchange for stock with a fair market value of $5,250 and $720 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $830 on the property transferred. Casey also incurred selling expenses of $461. What is the amount realized by Casey in the exchange

Answer 1

Answer:

$5789

Explanation:

Calculation to determine the amount realized by Casey in the exchange

Fair market value of stock $5250

Add Cash in transaction $ 720

Add Liability which is going to the buyer $ 830

Less Selling expenses ($461)

Amount realized $5789

($5250+$720+$830-$461)

Therefore the amount realized by Casey in the exchange is $5789