Kevin and Nicole Form Indigo Corporation with the Following Transfers

question 84

Multiple Choice

Kevin and Nicole form Indigo Corporation with the following transfers: inventory from Kevin (basis of $360,000 and fair market value of $400,000) and improved real estate from Nicole (basis of $320,000 and fair market value of $375,000) .Nicole,an accountant,agrees to contribute her services (worth $25,000) in organizing Indigo.The corporation's stock is distributed equally to Kevin and Nicole.As a result of these transfers:

• A)Indigo can deduct $25,000 as a business expense.
• B)Nicole has a recognized gain of $55,000 on the transfer of the real estate.
• C)Indigo has a basis of $360,000 in the inventory.
• D)Indigo has a basis of $375,000 in the real estate.
• E)None of the above.

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Definitions:

Immigrants

Individuals who move from their country of origin to live in a foreign country, often seeking better living conditions, employment, or educational opportunities.

Lifetime Likelihood

The probability or chance of encountering or experiencing a particular event or series of events over the course of a lifetime.

Imprisonment

The state of being confined in prison as a punishment for crimes committed.

Prison Populations

Individuals confined in a prison or jail, a group often analyzed for demographic trends, recidivism rates, and impacts of criminal justice policies.