Jack Exchanged Land with an Adjusted Basis of $65,000 Subject

question 75

Multiple Choice

Jack exchanged land with an adjusted basis of $65,000 subject to a liability of $22,000 for $50,000 (FMV) of stock owned by Hayden.Hayden takes the land subject to the liability.Jack incurs $500 of selling expenses.What is the amount of Jack's realized gain on the exchange?

• A)($14,000)loss
• B)($14,500)loss
• C)$6,500 gain
• D)$7,000 gain

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Definitions:

Proxy

A document authorizing a person to vote on another's behalf during corporate meetings or a computer server acting as an intermediary for requests from clients.

Straight Voting

A voting system in corporate elections where shareholders must vote for directors individually, rather than as a slate, often limiting the influence of minority shareholders.

Classes of Common Stock

Different types of equity shares issued by a company, each with specific rights, privileges, or voting powers.