F and G Formed a Corporation on March 1 This

question 24

Multiple Choice

F and G formed a corporation on March 1 this year.F transferred equipment worth $40,000 (basis $15,000) in exchange for 40 shares of stock, and performed services worth $10,000 in exchange for 10 shares of stock.In exchange for 50 shares of stock, G contributed land worth $70,000 (basis $9,000) subject to a mortgage of $20,000, which the corporation assumed.Assuming G recognized $27,500 of gain on the exchange, the corporation's basis for the land received is

• A)$9,000
• B)$70,000
• C)$36,500
• D)$50,000

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Definitions:

Investment Securities

Financial instruments purchased with the aim of generating income or appreciating in value, such as stocks, bonds, and mutual funds.

Raise Capital

The process by which a company or organization obtains money for growing operations, typically through the issuance of stocks or bonds.

Investment Bankers

Professionals who work for financial institutions, facilitating mergers, acquisitions, and issuing of securities for corporations and governments.

Commercial Bankers

Professionals working in commercial banks that provide a variety of financial services including loans, deposits, and investment products to businesses and individuals.