Broom Corporation Transfers Assets with an Adjusted Basis of $300,000 $$\begin{array} { | l | l | } \hline \text { Broom } & \text { Docker } \\\hline \$ 0 & \$ 0 \\\hline\end{array}$$

question 31

Multiple Choice

Broom Corporation transfers assets with an adjusted basis of $300,000 and an FMV of $400,000 to Docker Corporation in exchange for $400,000 of Docker Corporation stock as part of a tax-free reorganization. The Docker stock had been purchased from its shareholders one year earlier for $350,000. How much gain do Broom and Docker Corporations recognize on the asset transfer?

• A) \[\begin{array} { | l | l | }
• \hline \text { Broom } & \text { Docker } \\
• \hline \$ 0 & \$ 0 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \hline \text { Broom } & \text { Docker } \\
• \hline \$ 0 & \$ 50,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | }
• \hline \text { Broom } & \text { Docker } \\
• \hline \$ 100,000 & \$ 0 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | }
• \hline \text { Broom } & \text { Docker } \\
• \hline \$ 100,000 & \$ 50,000 \\
• \hline
• \end{array}\]

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Definitions:

Computer-Assisted Interviews

The use of computer technology to conduct interviews, including both software that guides the interview process and online platforms for remote interviewing.

Honest Responses

Genuine, truthful answers or feedback provided without deceit or manipulation.

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A strategy or methodology that emphasizes collaboration, unity, and shared responsibility among members working towards a common goal.

Series Interview

A set of interviews conducted in sequence, often with the same subject, to gather detailed information over time.