Tara Transfers Land with a $690,000 Adjusted Basis and a $700,000

question 1286

Multiple Choice

Tara transfers land with a $690,000 adjusted basis and a $700,000 FMV to a corporation in a Sec. 351 transfer. Immediately after the transfer, Tara owns 100% of the corporation- stock with a FMV of $615,000. In addition, $85,000 of business- related liabilities are assumed by the corporation with respect to the transfer. No other property is transferred. Tara's recognized gain on the transfer is

• A) $0.
• B) $5,000.
• C) $15,000.
• D) $10,000.

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Definitions:

Qualified Endorsement

A type of endorsement on a negotiable instrument, which limits the liability of the endorser.

Without Recourse

A term indicating that the seller of a financial instrument assumes no liability if the instrument fails to perform.

Qualified Endorsement

An endorsement on a negotiable instrument that includes conditions limiting the liability of the endorser.

Special

Distinguished by a unique or particular quality, different from the norm.