Roberta Transfers Property with a Tax Basis of $400 and a Fair

question 49

Multiple Choice

Roberta transfers property with a tax basis of $400 and a fair market value of $500 to a corporation in exchange for stock with a fair market value of $350 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $150 on the property transferred. What is the amount realized by Roberta in the exchange?

• A)$500
• B)$400
• C)$350
• D)$250

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Definitions:

Economic Events

Transactions and occurrences that affect the financial position of a business entity.

Basic Accounting Equation

Represents the foundation of double-entry bookkeeping, stating that assets equal liabilities plus equity.

Assets

Resources owned by a business that are expected to provide future economic benefits.

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.