Zebra Corporation Transfers Assets with a $120,000 Basis and a $250,000

question 100

Essay

Zebra Corporation transfers assets with a $120,000 basis and a $250,000 FMV to Hat Corporation for common stock worth $200,000 and cash of $50,000. The exchange qualifies as a tax-free reorganization. Zebra Corporation distributes the stock and cash to its shareholders pursuant to its liquidation. How much gain must Zebra Corporation recognize?

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Definitions:

UCS

An abbreviation commonly used in psychology for "Unconditioned Stimulus," which is a stimulus that naturally triggers a response without the need for prior conditioning.

Fear-Producing Stimulus

An object, event, or situation that induces a fear response in an individual.

"Little Albert" Study

An experiment conducted by John B. Watson and Rosalie Rayner that demonstrated classical conditioning in humans by showing how an infant named Albert became conditioned to fear a white rat.

Conditioned Response

A learned reaction to a conditioned stimulus that occurs because of previous conditioning, as demonstrated in classical conditioning experiments.