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 9

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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Definitions:

DSM

The Diagnostic and Statistical Manual of Mental Disorders, a guide used by healthcare professionals to diagnose mental disorders.

Uncontrollable Worry

Excessive anxiety and concern about multiple events or activities that is difficult to control.

Jittery

Feeling nervous or anxious, often with involuntary movements or shaky actions.

Obsession

An intrusive and persistent thought, idea, or image that causes significant anxiety or distress.