Question

Glenda Goodwich contributes property with a basis of $20,000 and a fair market value of $100,000 to form WOZ Corporation in exchange for 100 shares of WOZ common stock with a fair market value of $80,000 and $20,000 cash. This contribution will result in ___________

Answer 1

The answer is given below;

Step-by-step explanation:

The contribution will neither result in gain nor loss.

The fair market value of property is $100,000 and ownership of Glenda Goodwich in form of stocks and cash is also $100,000.

Therefore no gain no loss will be recognized.