Gabriella and Juanita Form Luster Corporation

question 73

Multiple Choice

Gabriella and Juanita form Luster Corporation. Gabriella transfers cash of $50,000 for 50 shares of stock, while Juanita transfers information concerning a proprietary process (basis of zero and fair market value of $50,000) for 50 shares of stock.

• A) The transfers to Luster are fully taxable to both Gabriella and Juanita.
• B) Juanita must recognize gain of $50,000.
• C) Because Juanita is required to recognize gain on the transfer, Gabriella also must recognize gain.
• D) Neither Gabriella nor Juanita will recognize gain on the transfer.
• E) None of the above.

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Definitions:

Sexual Selection

Refers to differential reproductive success resulting from the competition for fertilization, which can occur through competition among individuals of the same sex (intrasexual selection) or through attraction to the opposite sex (intersexual selection).

Heterozygote Advantage

A genetic phenomenon where individuals with two different alleles for a particular trait have a greater fitness than those with two identical alleles.

Frequency-Dependent Selection

A type of natural selection where the fitness of a phenotype or genotype depends on its frequency in the population.

GDF9 Gene

A gene that is important for ovarian follicle development in females and has been implicated in fertility.