David Owns 600 Shares of K Corporation Stock When K

question 57

Multiple Choice

David owns 600 shares of K Corporation stock when K is merged into Parent Corporation.David receives 500 shares of Parent Corporation stock (fair market value = $10,500) and $500 cash in exchange for his K Corporation stock.David's K stock had a basis of $8,000 and an $11,000 fair market value.What is David's realized and recognized gain, respectively?

• A)$3,000 and $3,000
• B) $3,000 and $2,500
• C)$2,500 and $500
• D)$3,000 and $500

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Definitions:

Meditation

A practice of focused attention or contemplation to achieve a mentally clear and emotionally calm state.

Stress Effects

The physical, psychological, and emotional responses or changes resulting from the pressures or demands on an individual.

Relaxation

Relaxation refers to the process or state of reducing tension and stress, resulting in a sense of increased well-being.

Pessimism

The tendency to see the worst aspect of things or believe that the worst will happen; a lack of hope or confidence in the future.