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:

Lewis Structures

Illustrations depicting the connections among atoms within a molecule and the unpaired electrons that might be present.

Alkali Metals

A group of elements in group 1 of the periodic table, characterized by their highly reactive properties and a single electron in their outermost shell.

Electron

A subatomic particle with a negative electrical charge that orbits the nucleus of an atom.

Ionic Bond

A chemical bond formed through the electrical force between oppositely charged ions.