Dick, a Cash Basis Taxpayer, Incorporates His Sole Proprietorship ? with Respect to This Transaction:
A)Orange Corporation's Basis in the Following

question 113

Multiple Choice

Dick, a cash basis taxpayer, incorporates his sole proprietorship.He transfers the following items to newly created Orange Corporation. $\begin{array}{lrr} &&\text { Fair Market }\\& \text { Adjusted Basis } & \text { Value } \\\text { Cash } & \$ 10,000 & \$ 10,000 \\\text { Buil ding } & 120,000 & 175,000 \\\text { Mortgage payable (secured by the building and held } & 135,000 & 135,000\\\text { for } 15 \text { years) }\end{array}$ ? With respect to this transaction:

• A)Orange Corporation's basis in the building is $120,000.
• B)Dick has no recognized gain.
• C)Dick has a recognized gain of $5,000.
• D)Dick has a recognized gain of $10,000.
• E)None of the above.

---

Definitions:

Severe Seizures

Intense convulsions or episodes of abnormal electrical activity in the brain, resulting in involuntary movements and behaviors.

Sympathetic Activation

The process in which the sympathetic nervous system enhances its activity, leading to effects like increased heart rate and energy mobilization for fight-or-flight responses.

Fight Or Flight

A physiological response to perceived harmful events, attacks, or threats to survival.

Thalamus

A part of the brain located above the brainstem that acts as the main relay station for information traveling to and from the cortex, influencing motor control, consciousness, and sensory perception.