Broom Corporation Transfers Assets with an Adjusted Basis of $300,000

question 21

Multiple Choice

Broom Corporation transfers assets with an adjusted basis of $300,000 and an FMV of $400,000 to Docker Corporation in exchange for $400,000 of Docker Corporation stock as part of a tax-free reorganization. The Docker stock had been purchased from its shareholders one year earlier for $350,000. How much gain do Broom and Docker Corporations recognize on the asset transfer?

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Definitions:

DELETE

A command used in computer programming and databases to remove data or records.

BACKSPACE

A keyboard key that deletes the character to the left of the cursor, or moves the cursor back one space when editing text.

Clipboard

A temporary storage area for data that the user wants to copy from one place to another.

Misspelled

Written or spelled in an incorrect manner.