Rob, Bill, and Steve Form Big Company

question 17

Multiple Choice

Rob, Bill, and Steve form Big Company. Rob performs $45,000 of services for his 45 shares of the company. Bill transferred property with a basis of $5,000 for $75,000 of stock (75 shares) . Steve contributes cash of $100,000 for his 100 shares. Which of the three must recognize income in the year of the formation?

• A)Rob
• B)Rob, Bill
• C)Bill
• D)Steve, Bill
• E)Steve, Rob

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Definitions:

Community Life

The aspect of social life that is concerned with the quality of interactions and relationships within a community setting.

Care Ethics

An ethical theory that emphasizes the moral importance of caring and nurturing relationships, focusing on responsiveness to the needs of others.

Abstract Theorizing

The process of thinking and theorizing in a way that is detached from practical considerations or concrete instances.

Aristotle

An ancient Greek philosopher and polymath, a student of Plato and teacher of Alexander the Great, whose works covered various subjects including physics, metaphysics, poetry, theater, music, logic, rhetoric, politics, government, ethics, biology, and zoology.