Max Transfers the Following Properties to a Newly Created Corporation

question 117

Multiple Choice

Max transfers the following properties to a newly created corporation for $90,000 of stock and $10,000 cash in a transaction that qualifies under Sec. 351. Max's recognized gain is

• A) $3,000.
• B) $5,000.
• C) $7,000.
• D) $10,000.

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Definitions:

Policy of Appeasement

A diplomatic strategy aimed at avoiding conflict by making concessions to an aggressive country or leader.

Germany's Aggressive Moves

Actions taken by Germany, particularly in the early 20th century, that were seen as hostile or expansionist, leading up to both World War I and World War II.

Munich Accord

An agreement reached in 1938 among Germany, Great Britain, France, and Italy that allowed Nazi Germany to annex part of Czechoslovakia in an attempt to appease Hitler and avoid war.

Sudeten Region

An area in Czechoslovakia, now part of the Czech Republic, whose German-speaking populace was at the heart of the Munich Agreement of 1938, leading to its annexation by Nazi Germany.