Ralph Transfers Property with an Adjusted Basis of $65,000 and an FMV

question 29

Multiple Choice

Ralph transfers property with an adjusted basis of $65,000 and an FMV of $70,000 to Lake Corporation in a Sec. 351 transaction. Ralph receives stock worth $60,000 and a short-term note having a $10,000 FMV. Ralph's basis in the stock is

• A)$75,000.
• B)$70,000.
• C)$65,000.
• D)$60,000.

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Definitions:

Extended Family

A familial grouping that extends beyond the nuclear family to include grandparents, aunts, uncles, and other relatives.

Family Wage System

An economic system where wages paid are sufficient to support a worker's entire family.

Social Disorganization

A theory that attributes high levels of crime and deviance to the absence or breakdown of communal relationships and social institutions.

Functionalist

A viewpoint in sociology which views society as an intricate system where various components collaborate to foster unity and maintain balance.