Rick transferred the following assets and liabilities to Warbler Corporation. Adjusted Basis Fair Market Value Building $210,000 $225,000 Equipment 45,000 75,000 Trucks 15,000 30,000 Mortgage
Rick transferred the following assets and liabilities to Warbler Corporation. Adjusted Basis Fair Market Value Building $210,000 $225,000 Equipment 45,000 75,000 Trucks 15,000 30,000 Mortgage (held for four years) on building 30,000 30,000 In return, Rick received $75,000 in cash plus 90% of Warbler Corporation’s only class of stock outstanding (fair market value of $225,000). a.Rick’s basis in the stock of Warbler Corporation is $270,000. b.Rick has a recognized gain of $75,000. c.Rick has a recognized gain of $60,000. d.Warbler Corporation has the same basis in the assets received as Rick does in the stock.
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