Mary Transfers a Building (Adjusted Basis of $15,000 and Fair

question 16

Multiple Choice

Mary transfers a building (adjusted basis of $15,000 and fair market value of $90,000) to White Corporation. In return, Mary receives 80% of White Corporation's stock (worth $65,000) and an automobile (fair market value of $5,000) . In addition, there is an outstanding mortgage of $20,000 (taken out 15 years ago) on the building, which
White Corporation assumes. With respect to this transaction:

• A) Mary's recognized gain is $10,000.
• B) Mary's recognized gain is $5,000.
• C) Mary has no recognized gain.
• D) White Corporation's basis in the building is $15,000.
• E) None of these.

---

Definitions:

Individuals with Disabilities Education Act

A U.S. law that ensures students with disabilities are provided with a Free Appropriate Public Education (FAPE) that is tailored to their individual needs.

Council for Exceptional Children

An international professional organization dedicated to improving the educational outcomes for individuals with exceptionalities, disabilities, and gifts.

Educational Standards

Established criteria to determine what students should know and be able to do at certain points in their education.

Least Restrictive Environments

Educational settings that provide the greatest degree of freedom for students with disabilities, while still meeting their learning needs.