Art, an Unmarried Individual, Transfers Property (Basis of $130,000 and Fair

question 36

Multiple Choice

Art, an unmarried individual, transfers property (basis of $130,000 and fair market value of $120,000) to Condor Corporation in exchange for §1244 stock. The transfer qualifies as a nontaxable exchange under § 351. Because the property is loss property, Condor takes a basis in the property of $120,000. Five years later, Art sells the Condor stock for $50,000. With respect to the sale, Art has:

• A) An ordinary loss of $80,000.
• B) An ordinary loss of $70,000 and a capital loss of $10,000.
• C) A capital loss of $80,000.
• D) A capital loss of $30,000 and an ordinary loss of $50,000.
• E) None of the above.

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Definitions:

Vasopressin

A hormone also known as antidiuretic hormone (ADH) that regulates water balance in the body and constricts blood vessels, playing a key role in maintaining blood pressure.

Luteinizing Hormone

A hormone produced by the anterior pituitary gland that helps regulate the menstrual cycle and egg production (ovulation) in females, and sperm production in males.

Blood Sugar

The concentration of glucose present in the blood, crucial for maintaining energy levels and physiological functions.

Thyroid Gland

An endocrine gland located in the neck that produces hormones regulating metabolism, energy generation, and the body's sensitivity to other hormones.