Rick Transferred the Following Assets and Liabilities to Warbler Corporation

question 52

Multiple Choice

Rick transferred the following assets and liabilities to Warbler Corporation. $$\begin{array} { l r r } & & \text { Fair Market } \\& \text { Adjusted Basis } & \text { Value } \\\text { Building } & \$ 210,000 & \$ 225,000 \\\text { Equipment } & 45,000 & 75,000 \\\text { Trucks } & 15,000 & 30,000 \\\text { Mortgage (held for four years) on building } & 30,000 & 30,000\end{array}$$ ? In return, Rick received $75,000 in cash plus 90% of Warbler Corporation's only class of stock outstanding (fair market value of $225,000) .

• A)Rick has a recognized gain of $60,000.
• B)Rick has a recognized gain of $75,000.
• C)Rick's basis in the stock of Warbler Corporation is $270,000.
• D)Warbler Corporation has the same basis in the assets received as Rick does in the stock.
• E)None of the above.

---

Definitions:

Needle/Syringe

A medical tool used for injecting substances into the body or withdrawing fluids from it.

Sterile Field

An area created to prevent infection during surgical procedures, maintained free of microorganisms.

Postoperative Instructions

Guidelines given to patients after surgery to ensure proper healing and recovery, including care of the surgical site, medication details, and activity restrictions.

Medical Assistant

A healthcare professional who performs administrative and clinical tasks to support patient care in medical settings.