Question

Casey transfers property with a tax basis of $2,640 and a fair market value of $7,000 to a corporation in exchange for stock with a fair market value of $5,100 and $835 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $1,065 on the property transferred. Casey also incurred selling expenses of $547. What is the amount realized by Casey in the exchange

Answer 1

Answer: $6453

Explanation:

The amount realized by Casey in the exchange will be calculated thus:

Fair market value of stock received = $5100

Add: Deferral = $835

Add: Assumed mortgage = $1065

Less: Selling expense = $547

Amount realized = $6453

Therefore, the amount realized by Casey in the exchange is $6453