Cherie Transfers Two Assets to a Newly-Created Corporation

question 76

Multiple Choice

Cherie transfers two assets to a newly-created corporation.The first asset has an adjusted basis of $40,000 and a FMV of $50,000.The second asset has an adjusted basis of $35,000 and a FMV of $25,000.Cherie receives stock with FMV of $66,000 and $9,000 cash.Cherie must recognize a gain of

• A)$10,000.
• B)$6,000.
• C)$5,000.
• D)$4,000.

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Definitions:

Control Group

In experimental research, the group of participants that does not receive the treatment or intervention being tested, used as a baseline to measure the effects of the treatment.

Experimental Group

The group in an experiment whose experience is changed as part of the experiment.

Hypothetical Group

An imagined or theoretical group of individuals created for the purpose of discussion, analysis, or experimentation.

Reliable

Consistently good in quality or performance; able to be trusted.