Sarah Transfers Property with an $80,000 Adjusted Basis and a $100,000

question 63

Multiple Choice

Sarah transfers property with an $80,000 adjusted basis and a $100,000 FMV to Super Corporation in a Sec. 351 transaction. Sarah receives stock with an $85,000 FMV and a short-term note with a $15,000 FMV. Sarah's basis in the stock is

• A)$100,000.
• B)$95,000.
• C)$85,000.
• D)$80,000.

---

Definitions:

Self-Serving Bias

A cognitive bias where individuals attribute positive outcomes to their own actions and negative outcomes to external factors, protecting self-esteem.

Scapegoat Theory

A social psychology concept that explains the tendency to blame someone else for one's own problems, often as a way of deflecting attention from one's own failures.

Outgroups

Any group with which an individual does not identify, often viewed oppositely to the in-group and sometimes subject to biases and stereotypes.

Salience

The quality of being particularly noticeable or important; the state at which something stands out from its background or context.