Roy Transfers Property with a Tax Basis of $800 and a Fair

question 99

Multiple Choice

Roy transfers property with a tax basis of $800 and a fair market value of $500 to a corporation in exchange for stock with a fair market value of $400 and $50 cash in a transaction that qualifies for deferral under section 351.The corporation assumed a liability of $50 on the property transferred.What is Roy's tax basis in the stock received in the exchange?

• A)$800.
• B)$750.
• C)$700.
• D)$500.

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Definitions:

Exchange Rate

The worth of one currency in relation to another, establishing how much of one currency can be exchanged for another.

Lawn Mower

A lawn mower is a machine utilizing one or more revolving blades to cut a grass surface to an even height, powered manually or by an engine.

Price Increase

A rise in the cost or value of goods and services, which can affect consumer behavior and inflation rates.

Consumers

Individuals or groups who use goods and services produced within an economy.