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home / study / business / accounting / accounting questions and answers / For Bona Dude Business Purposes Dave Transferred The Following Property To X Corp., And X Assumed ... Question: For bona dude business purposes Dave transferred the following property to X Corp., and X assumed... For bona dude business purposes Dave transferred the following property to X Corp., and X assumed the &50,000 mortgage Building and land. Asset basis $120,000 Mortgage $50000 Fair market value $160000 Various equipment 60000. FMV 40000 In exchange Dave received 100% of Xs only class of stock. What is Xs basis in the property received after the exchange

Answer 1

Particulars	Amount ($)	Amount ($)
Fair market value of the mortgage	160,000.00
Less: Mortgage	50,000.00
Net basis of building		110,000.00
Add: Fair market value of various equipment		40,000.00
X's basis in the property		150,000.00

Thus, X’s basis in the property after exchange is $150,000. This is after taking into consideration the fair market value of the various property as on the date of exchange.