Yenhung,who Is Single,forms a Corporation Using a Tax-Free Asset Transfer,which $$\begin{array} {| l | l |} \hline \text { Ordinary loss } & \text { Capital loss } \\\hline \$ 0 & \$ 20,000 \\\hline\end{array}$$

question 67

Multiple Choice

Yenhung,who is single,forms a corporation using a tax-free asset transfer,which qualifies under Sec.351.She contributes property having an adjusted basis of $50,000 and an FMV of $40,000.The stock received from the corporation is Sec.1244 stock.When Yenhung sells the stock for $30,000,her loss is

• A) \[\begin{array} {| l | l |}
• \hline \text { Ordinary loss } & \text { Capital loss } \\
• \hline \$ 0 & \$ 20,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} {| l | l |}
• \hline \text { Ordinary loss } & \text { Capital loss } \\
• \hline \$ 10,000 & \$ 10,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} {| l | l| }
• \hline \text { Ordinary loss } & \text { Capital loss } \\
• \hline\$ 20,000 & \$ 0 \\
• \hline
• \end{array}\]
• D) \[\begin{array} {| l | l| }
• \hline \text { Ordinary loss } & \text { Capital loss } \\
• \hline\$ 10,000 & \$ 0 \\
• \hline
• \end{array}\]

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