Jerry Transfers Two Assets to a Corporation as Part of a Sec

question 15

Multiple Choice

Jerry transfers two assets to a corporation as part of a Sec. 351 exchange. The first asset has an adjusted basis of $70,000 and an FMV of $50,000. The second asset has an adjusted basis of $70,000 and an FMV of $150,000. The FMV of the stock received is $180,000, and he also receives $20,000 cash. The realized and recognized gain on the second asset is

• A) $80,000 realized; $20,000 recognized.
• B) $10,000 realized; $10,000 recognized.
• C) $80,000 realized; $15,000 recognized.
• D) $20,000 realized; $10,000 recognized.

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Definitions:

Retaliation

The act of returning an injury or wrong experienced with another injury or wrong, often seen in contexts of conflict or competition.

Divorce Act

Legislation governing the legal process for divorce, outlining grounds for divorce and associated legal requirements and implications.

Adultery

A sexual act between a married person and someone other than their spouse, considered a breach of trust or marriage vows.

Desertion

The act of abandoning a person, place, or obligation, especially in a military context where it refers to a soldier leaving their post without permission.