Under the Terms of Their Divorce Agreement,Humphrey Transferred Corporation H

question 92

Multiple Choice

Under the terms of their divorce agreement,Humphrey transferred Corporation H stock to his former wife,Greta,as a property settlement.At the time of the transfer,the stock had a basis to Humphrey of $40,000 and a fair market value of $55,000.What is the tax consequence of this transaction to Humphrey,and what is Greta's basis in the Corporation H stock?

• A)Humphrey has no gain or loss; Greta's basis is $55,000.
• B)Humphrey has no gain or loss; Greta's basis is $40,000.
• C)Humphrey has a gain of $15,000; Greta's basis is $55,000.
• D)Humphrey has a gain of $15,000; Greta's basis is $40,000.

---

Definitions:

Businesses

Organizations engaged in commercial, industrial, or professional activities with the aim of generating profits.

James Bay

A large body of water on the southern end of Hudson Bay in Canada, known for its surrounding wilderness and indigenous communities.

Northern Quebec Agreement

A legally binding accord between the government of Quebec, the government of Canada, and several indigenous groups, addressing land use and rights in Northern Quebec.

Northeastern Quebec Agreement

A formal accord concerning the development and management of natural resources in Northeastern Quebec.