[jpabla89]

Hey guys,

For the question below, would this scenario apply to Partnerships and C Corps as well? I thought there was no gain on formation of Corporations and Partnerships:

The sole shareholder of an S corporation contributed equipment with a fair market value of $20,000 and a basis of $6,000 subject to $12,000 liability. What amount is the gain, if any, that the shareholder must recognize?

A.

$0

B.

$6,000 — CORRECT

C.

$8,000

D.

$12,000