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?

---

Definitions:

Reform Movements

Social or political movements aimed at making gradual improvements or changes in society, often focused on issues like civil rights, gender equality, or environmental protection.

Mid-19th Century

The period approximately between 1830 to 1870, marked by significant industrial, social, and political changes in many parts of the world.

American Culture

Refers to the set of customs, traditions, and values of the people living in the United States.

European Influence

Refers to the impact and effect European cultures, policies, and economics have had on other regions worldwide, shaping global history, colonization, and international relations.