Beth Transfers an Asset Having an FMV of $200,000 and an Adjusted

question 85

Multiple Choice

Beth transfers an asset having an FMV of $200,000 and an adjusted basis of $150,000 to ABC Corporation in a Sec. 351 transaction. Beth receives in exchange ABC common stock having an FMV of $175,000 and Zeus Corporation common stock (a capital asset) having an FMV of $25,000 and a basis of $10,000 to ABC Corporation. ABC Corporation must recognize

• A)no gain.
• B)a $15,000 capital gain.
• C)a $25,000 capital gain.
• D)a $50,000 capital gain.

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Definitions:

Sustainable Enterprise

A business designed to operate in a manner that meets present needs without compromising the ability of future generations to meet their needs.

Green Chemistry

The design of chemical products and processes that reduce or eliminate the use and generation of hazardous substances.

Petrochemical-Based Economy

An economy that is heavily dependent on petroleum and natural gas as raw materials for the chemical industry and energy production.

Reengineer Entire Systems

The process of fundamentally redesigning and restructuring systems to achieve dramatic improvements in performance, efficiency, and output.