Janice Transfers Land and a Building with a $180,000 Adjusted

question 50

Essay

Janice transfers land and a building with a $180,000 adjusted basis and a $200,000 FMV to Optimum Corporation in exchange for 100% of its stock in a transaction qualifying under Sec.351.Shortly before the transfer,Janice obtains a $140,000 mortgage on the property and uses the funds to pay off personal debts.The corporation then assumes the $140,000 mortgage and issues stock worth $60,000.The mortgage assumption lacks business purpose and is intended to place cash in Janice's hands.
a.What is the gain realized by Janice?
b.What is the gain recognized by Janice?
c.What is the basis of the stock received by Janice?
d.What is Optimum's basis in the land and building?

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Definitions:

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, responsible for integrating sensory information and responding accordingly.

Specialized Neurons

Nerve cells that are tailored for specific tasks within the nervous system, such as sensory reception or muscle control.

Interneurons

Nerve cells within the central nervous system that connect sensory and motor neurons, playing a critical role in reflexes and neuronal circuits.

Axons

Long, threadlike parts of nerve cells which transmit electrical impulses away from the neuron's cell body.