Stock Basis - Corporate

[EllenG]

Hi All,

I'm down to Test 2 - Businesses to complete my EA. I'm scheduled for Oct 24. I am having a terrible time getting basis into my brain! Any help would be greatly appreciated!

[TaxGuyBill]

Have you looked at and studied this link?

https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-stock-and-debt-basis

[Golden Rocket]

Specific Question

I'm assuming you can look at links and publications until the cows come home and not understand any of it.

Do you have a specific question?

[EllenG]

I'm assuming you can look at links and publications until the cows come home and not understand any of it.

Do you have a specific question?

Of course!

Property with an adjusted basis of $45,000 was transferred by Susan to her controlled corporation under Code Sec. 351. In exchange, she received stock with a FMV of $70,000, cash of $30,000 and the assumption of her liability on the property of $20,000. What is the amount of gain recognized by Susan?
Property with an adjusted basis of $45,000 was transferred by Susan to her controlled corporation under Code Sec. 351. In exchange, she received stock with a FMV of $70,000, cash of $30,000 and the assumption of her liability on the property of $20,000. What is the amount of gain recognized by Susan?

[EllenG]

Have you looked at and studied this link?

https://www.irs.gov/businesses/small...and-debt-basis

Yes, but I will look again

[kathyc2]

Of course!

Property with an adjusted basis of $45,000 was transferred by Susan to her controlled corporation under Code Sec. 351. In exchange, she received stock with a FMV of $70,000, cash of $30,000 and the assumption of her liability on the property of $20,000. What is the amount of gain recognized by Susan?
Property with an adjusted basis of $45,000 was transferred by Susan to her controlled corporation under Code Sec. 351. In exchange, she received stock with a FMV of $70,000, cash of $30,000 and the assumption of her liability on the property of $20,000. What is the amount of gain recognized by Susan?

Your question is not about basis, they are telling you what the basis is. You need to calculate the amount of gain recognized. Pub 542 will have the answers.

[TaxGuyBill]

Of course!

Property with an adjusted basis of $45,000 was transferred by Susan to her controlled corporation under Code Sec. 351. In exchange, she received stock with a FMV of $70,000, cash of $30,000 and the assumption of her liability on the property of $20,000. What is the amount of gain recognized by Susan?

The 'trick' of this one is to know what §351 means and does.

https://www.irs.gov/publications/p542/ar02.html#en_US_2011_publink1000257749

https://www.law.cornell.edu/uscode/text/26/351

[EllenG]

Your question is not about basis, they are telling you what the basis is. You need to calculate the amount of gain recognized. Pub 542 will have the answers.

You're correct, sorry....I posted the wrong one