Key Corporation Distributes a Patent with an Indeterminable Value to Gary

question 62

Multiple Choice

Key Corporation distributes a patent with an indeterminable value to Gary as part of a plan of complete liquidation. In addition, Gary receives $40,000 cash and land with a $70,000 FMV and a $30,000 adjusted basis. Gary's basis in the Key stock (a capital asset) surrendered is $120,000. If Gary relies on the open transaction doctrine, at the liquidation date he must recognize a

• A)$0 gain.
• B)$10,000 capital loss.
• C)$30,000 capital loss.
• D)$70,000 capital gain.

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Definitions:

Four Humors

An ancient and obsolete medical theory stating that human health and temperament are governed by four bodily fluids: blood, phlegm, black bile, and yellow bile.

Personality Disorders

A group of mental health conditions characterized by lasting patterns of thought, feeling, and behavior that are significantly different from societal expectations and cause distress or impaired functioning.

Maladaptive Pattern

Behaviors or ways of thinking that are counterproductive to an individual's well-being or ability to reach goals.

Dopamine

A neurotransmitter involved in controlling the brain's reward and pleasure centers, as well as regulating movement and emotional responses.