### What is the amount and character of the recognized gain

Assignment Help Accounting Basics
##### Reference no: EM13131713

Sylva transfers to Leaf Corporation a machine she had purchased a year ago for \$50,000. The machine has a \$40,000 adjusted basis and a \$55,000 FMV on the transfer date. \$10,000 in depreciation was claimed by Silvia prior to the transfer. Silvia receives all 1,000 shares of Leaf Corporation stock worth \$55,000 and a two-year note with a \$5,000 FMV. What is the amount and character of the recognized gain or loss?

A) \$15,000 ordinary income
B) \$15,000 capital gain
C) \$5,000 ordinary income
D) \$5,000 capital gain

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