Wally Contributes Land (Adjusted Basis of $30,000; Fair Market Value

question 81

True/False

Wally contributes land (adjusted basis of $30,000; fair market value of $100,000) to an S corporation in a transaction which qualifies under § 351. The corporation subsequently sells the land for $120,000, recognizing a gain of $90,000 ($120,000 - $30,000). If Wally owns 30% of the stock, $76,000 [$70,000 + 30%($20,000)] of the $90,000 recognized gain is allocated to Wally.

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Definitions:

Maples

A genus of trees or shrubs known as Acer, characterized by their distinctive leaf shapes and prized for their autumn leaf colors and maple syrup.

Temperate Deciduous Forest

A biome characterized by four distinct seasons and deciduous trees that lose their leaves annually.

Tropical Zone

The Earth's region located between the Tropic of Cancer and the Tropic of Capricorn, characterized by warm temperatures year-round.

Broadleaf Evergreen

Trees or shrubs with wide leaves that remain green and do not shed during the year, often found in tropical and subtropical climates.