Kirby and Helen Form Red Corporation

question 7

Multiple Choice

Kirby and Helen form Red Corporation. Kirby transfers property, basis of $20,000 and value of $300,000, for 100 shares in Red Corporation. Helen transfers property, basis of $40,000 and value of $280,000, and provides legal services in organizing the corporation. The value of her services is $20,000. In return Helen receives 100 shares in Red Corporation. With respect to the transfers:

• A) Kirby will recognize gain.
• B) Helen will not recognize any gain or income.
• C) Red Corporation will have a basis of $280,000 in the property it acquired from Helen.
• D) Red will have a business deduction of $20,000.
• E) None of the above.

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Definitions:

STEPPS

Systems Training for Emotional Predictability and Problem Solving, a group therapy program designed for individuals with borderline personality disorder or emotional regulation problems.

Borderline Personality Disorder

A mental health disorder characterized by unstable moods, behavior, and relationships, featuring impulsivity and a chronic sense of emptiness.

Amygdala

A region of the brain involved in experiencing emotions, particularly fear and pleasure, and plays a significant role in processing emotional reactions.

Borderline Personality Disorder

A mental health disorder that impacts the way a person thinks and feels about themselves and others, causing problems functioning in everyday life. It includes self-image issues, difficulty managing emotions and behavior, and a pattern of unstable relationships.