A Transfers Machines Valued at $170,000 (Basis = $150,000)along with $30,000

question 54

Multiple Choice

A transfers machines valued at $170,000 (basis = $150,000) along with $30,000 cash to AB Corporation and B transfers real property valued at $320,000 (basis = $310,000) to the corporation.A receives 40 percent of the outstanding stock and B receives 60 percent.B also receives $20,000 from the corporation.What is A's basis for his AB stock?

• A)$180,000
• B) $170,000
• C)$160,000
• D)$150,000
• E)None of the above

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Definitions:

Final Cash Flow

Final Cash Flow is the last cash inflow or outflow in a series of transactions, often associated with the termination or exit of an investment.

New Product Design

The process of creating a new product to be sold by a business to its customers.

Accounts Receivable

Financial obligations of customers towards a company for delivered but unpaid goods or services.