Rachel Owns 100% of the Stock of Cardinal Corporation

question 85

Multiple Choice

Rachel owns 100% of the stock of Cardinal Corporation. In the current year Rachel transfers an installment obligation, tax basis of $180,000 and fair market value of $350,000, for additional stock in Cardinal worth $350,000.

• A) Rachel has a taxable gain of $180,000.
• B) Rachel has a taxable gain of $170,000.
• C) Rachel recognizes no gain on the transfer.
• D) Rachel has a basis of $350,000 in the additional stock she received in Cardinal Corporation.
• E) None of the above.

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Definitions:

Inheritance

The act of receiving property, titles, debts, rights, or obligations upon the death of an individual.

Social Conflict

A situation where individuals or groups have incompatible interests, beliefs, or actions, leading to societal tension or dispute.

Kinship Groups

Social groups based on family connections, either biological or adopted, that define relationships and obligations between members.

Structural-Functional

A theoretical framework in sociology that views society as a complex system whose parts work together to promote solidarity and stability.