Rob and Yi Form Bluebird Corporation with the Following Investments

question 113

Multiple Choice

Rob and Yi form Bluebird Corporation with the following investments. Each receives 50% of Bluebird's stock.In addition, Yi receives cash of $40,000.One result of these transfers is that Yi has a:

• A)Recognized loss of $60,000.
• B)Recognized loss of $20,000.
• C)Basis of $460,000 in the Bluebird stock assuming Bluebird reduces its basis in the land to $440,000).
• D)Basis of $400,000 in the Bluebird stock assuming Bluebird reduces its basis in the land to $440,000).
• E)None of the above.

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Definitions:

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Excessive bleeding or the escape of blood from vessels into surrounding tissues, either internally or externally.

Platelets

Small blood cells that play a key role in clotting and stopping bleeding by clumping and forming plugs in blood vessel injuries.

Nitrosoureas

A class of chemotherapy drugs used to treat various types of cancer, known for their ability to cross the blood-brain barrier.