Question 24 Ann and Irene form AIB Corporation transferring their respective bus

Question

Question 24

Ann and Irene form AIB Corporation transferring their respective business assets to AIB Corporation. Ann exchanges her property with a basis to Ann of $100,000 and fair market value of $400,000 for 200 shares in AIB Corporation on March 1, 2014. Irene exchanges her property with a basis of $140,000 and fair market value of $600,000 for 300 shares in AIB Corporation on April 11, 2014, Bob transfers his property with a basis of $250,000 and fair market value of $1,000,000 for 500 shares in AIB Corporation on May 15, 2014. Bob’s transfer is not part of Ann and Irene’s plan to incorporate their businesses. What gain, if any, will Bob recognize on the transfer?

A. $0.

B. $250,000.

C. $750,000.

D. $1,000,000.

Explanation / Answer

Gain recognize on the transfer is equal to basis of property transferred which is $250000 Option B is correct

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