Rob and Yi Form Bluebird Corporation with the Following Investments

question 4

Multiple Choice

Rob and Yi form Bluebird Corporation with the following investments. Each receives 50% of Bluebird's stock. In addition, Yi receives cash of $40,000. One result of these transfers is that Yi has a:

• A) Recognized loss of $60,000.
• B) Recognized loss of $20,000.
• C) Basis of $460,000 in the Bluebird stock (assuming Bluebird reduces its basis in the land to $440,000).
• D) Basis of $400,000 in the Bluebird stock (assuming Bluebird reduces its basis in the land to $440,000).
• E) None of these.

---

Definitions:

Demand Characteristics

Subtle cues or signals in an experimental environment that influence participants' behaviors or responses.

Independent Variables

Factors or conditions that are manipulated or controlled by researchers to determine their effects on dependent variables.

Case History

A detailed account of a person's life and psychological problems, used for analysis or study.

Correlational Study

A research method that examines the relationship between two or more variables without manipulating them.