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Rita forms Finch Corporation by transferring land (basis of $125,000; fair market value of $750,000) which is subject to a mortgage of $375,000. Two weeks prior to incorporating Finch, Rita borrows $125,000 for personal purposes
and gives the lender a second mortgage on the land. Finch Corporation issues stock worth $250,000 to Rita and assumes the two mortgages on the land. What are the tax consequences to Rita and to Finch Corporation?
Mutual Funds
Funds that aggregate capital from numerous investors to acquire a varied collection of shares, bonds, or alternative financial instruments.
12b-1 Fee
A fee found in the expense ratio of some mutual funds, meant to cover marketing, distribution, and other costs.
Front-end Load
An upfront sales charge investors pay when they purchase mutual fund shares, which reduces the amount of the investment.
Back-end Load
A fee paid by investors when selling mutual fund shares, typically decreasing over time the longer shares are held, designed to discourage quick withdrawals.
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