Last Year, Toby Made a Capital Contribution of a Pretzel

question 55

Multiple Choice

Last year, Toby made a capital contribution of a pretzel maker having a $2,000 adjusted basis and a $200 FMV to Keke Corporation in exchange for additional stock. This year, Keke Corporation adopted a plan of liquidation. Prior to the adoption of the liquidation plan, Keke had not used the pretzel maker in connection with the conduct of its trade or business. Which of the following statements is true?

• A)Keke Corporation may recognize a loss of $1,800.
• B)Keke Corporation may recognize a loss of $200.
• C)Keke Corporation's basis for determining the loss will be $2,000.
• D)Keke Corporation's basis for determining the loss will be $200.

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Definitions:

Independent

Not influenced or controlled by others; in statistics, it refers to variables that are not related to each other.

Standard Deviations

A measure that quantifies the amount of variation or dispersion of a set of data values from the mean.

Soccer Team

A group of players, typically eleven, who participate together in the sport of soccer, competing in matches against other teams.

Random Variable

An unpredictable phenomenon's numerical outcome represented as a variable.