Casey Transfers Property with a Tax Basis of $2,000 and a Fair

question 56

Multiple Choice

Casey transfers property with a tax basis of $2,000 and a fair market value of $5,000 to a corporation in exchange for stock with a fair market value of $4,000 and $400 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $600 on the property transferred. Casey also incurred selling expenses of$300. What is the amount realized by Casey in the exchange?

• A) $4,700.
• B) $4,600.
• C) $5,000.
• D) $4,200.

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Definitions:

Prefrontal Lobotomy

A surgical procedure, once used to treat mental disorders, that involved severing connections in the brain's prefrontal lobe.

Nobel Prize

A prestigious international award given annually in several categories including Physics, Chemistry, Medicine, Literature, Peace, and Economic Sciences, recognized for outstanding contributions in these fields.

Trephining

A surgical intervention where a hole is drilled or scraped into the human skull, historically done for medical and ritualistic reasons.

Psychosurgery

A surgical operation on the brain intended to relieve severe mental disorders.