Sybil Transfers Property with a Tax Basis of $5,000 and a Fair

question 6

Multiple Choice

Sybil transfers property with a tax basis of $5,000 and a fair market value of $6,000 to a corporation in exchange for stock with a fair market value of $3,000 and $2,000 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $1,000 on the property transferred. What is Sybil's tax basis in the stockreceived in the exchange?

• A) $4,000.
• B) $6,000.
• C) $5,000.
• D) $3,000.

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Definitions:

Professional Baseball

A sport involving professional athletes who are paid to compete in baseball, typically organized in leagues and teams across various countries.

Free Agent Bargaining

A negotiation process in which individuals or entities freely engage in discussions to reach mutually beneficial agreements, often used in reference to sports and employment contracts.

Single Buyer

A market situation where there is only one buyer for a particular product or service, influencing the market conditions and prices.

Input Market

Markets where firms purchase resources and services needed for the production process, such as labor, raw materials, and machinery.