Mitchell and Powell Form Green Corporation

question 56

Multiple Choice

Mitchell and Powell form Green Corporation. Mitchell transfers property (basis of $105,000 and fair market value of $90,000) while Powell transfers land (basis of $8,000 and fair market value of $75,000) and $15,000 of cash. Each receives 50% of Green Corporation's stock (total value of $180,000) . As a result of these transfers:

• A) Mitchell has a recognized loss of $15,000, and Powell has a recognized gain of $67,000.
• B) Neither Mitchell nor Powell has any recognized gain or loss.
• C) Mitchell has no recognized loss, but Powell has a recognized gain of $15,000.
• D) Green Corporation will have a basis in the land of $23,000.
• E) None of the above.

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Definitions:

Quit A Habit

The process of stopping or breaking a regular tendency or practice, especially one that is considered detrimental to one’s health or well-being.

Daily Routine

A fixed schedule of activities that a person follows every day, which often helps in organizing time and tasks efficiently.

Smoking

The practice of inhaling and exhaling the smoke of burning tobacco, which can lead to addiction and various health issues.

Death Drive

A concept in psychoanalytic theory referring to an individual's unconscious desire for death, self-destruction, or returning to an inorganic state.