Sarah Transfers Property with an $80,000 Adjusted Basis and a $100,000

question 31

Multiple Choice

Sarah transfers property with an $80,000 adjusted basis and a $100,000 FMV to Super Corporation in a Sec. 351 transaction. Sarah receives stock with an $85,000 FMV and a short- term note with a $15,000 FMV. Sarah's basis in the stock is

• A) $80,000.
• B) $95,000.
• C) $100,000.
• D) $85,000.

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Definitions:

Capital Acquisitions Ratio

A financial metric used to determine the total capital being used for capital expenditures by a company.

Operating Activities

Activities that relate directly to the business's primary operations, including cash flows from selling goods and providing services, which are part of the company's core business function.

External Financing

Funds raised from outside the company, including loans, equity investments, and bonds, to finance its operations or growth.

Financing Activities

Transactions involving long-term liabilities and equity of a company, including issuing debt, repurchasing shares, and paying dividends.