Ralph Transfers Property with an Adjusted Basis of $65,000 and an FMV

question 11

Multiple Choice

Ralph transfers property with an adjusted basis of $65,000 and an FMV of $70,000 to Lake Corporation in a Sec. 351 transaction. Ralph receives stock worth $60,000 and a short- term note having a $10,000 FMV. Ralph's basis in the stock is

• A) $60,000.
• B) $75,000.
• C) $65,000.
• D) $70,000.

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Definitions:

Federal Funds Rate

The Federal Funds Rate is the interest rate at which depository institutions lend reserves maintained at the Federal Reserve to other depository institutions overnight.

Bankers' Acceptances

Short-term credit investments created by a non-financial firm and guaranteed by a bank.

Money Market Funds

Investment funds that invest in short-term debt securities with the aim of offering high liquidity with a low level of risk.

Institutional Funds

Investment pools that target large-scale investments, managed by professionals and accessible mainly to institutional investors.