Broderick and Rosie Form Basil Corporation

question 7

Multiple Choice

Broderick and Rosie form Basil Corporation.Broderick transfers property (basis of $400,000 and fair market value of $300,000) while Rosie transfers land (basis of $150,000 and fair market value of $280,000) and $20,000 of cash.Each receives 50% of Basil's stock.As a result of these transfers:

• A)Broderick has a recognized loss of $100,000, and Rosie has a recognized gain of $130,000.
• B)Neither Broderick nor Rosie has any recognized gain or loss.
• C)Broderick has no recognized loss, but Rosie has a recognized gain of $130,000.
• D)Basil Corporation will have a basis in the land of $280,000.
• E)None of the above.