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Please help!!
Question from Becker ( CPA – 02030)
Lind and Post organized Ace Corp, which issued voting common stock with a FMV of $120,000. They each transferred property in exchange for stock as follows –
(i) Lind – Property transferred – Building
Adjusted Basis – $40,000
FMV – $82,000
% of Ace Corp stock Acquired – 60%
Mortgage – $10,000 which was assumed by the Ace Corp,What amount of gain did Lind recognize?
Solution given by Becker – is NIL as there is no gain or loss in the event of formation of company.Now, my question is as Lind did not own 80% after the property transfer, then why did Lind not recognize the gain for the property transfer.
Can some one please help me?AUD - 78
BEC - NINJA in Training
FAR - 91
REG - NINJA in TrainingHeena
NINJA in training
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