j transferred land worth 50000 to his controlled corp for st

j transferred land worth 50000 to his controlled corp for stock of the corp worth 20000 & cash of 20000. The basis of the property to him was 15000 & was subject to a 10000 mortgage 9non-bona fide business purpose), which the corp assumed. J must report a gain of how much?

Solution

STOCK ACQUIRED WORTH 20000 CASH 20000 TOTAL 40000 PROPERTY TRANSFERRED BASIS FMV LAND 15000 50000 LESS: MORTGAGE -10000 -10000 NET 5000 40000 TOTAL AMOUNT 5000 40000 NET GAIN OR LOSS 35000 0