Art, an Unmarried Individual, Transfers Property (Basis of $130,000 and Fair

question 91

Multiple Choice

Art, an unmarried individual, transfers property (basis of $130,000 and fair market value of $120,000) to Condor Corporation in exchange for §1244 stock. The transfer qualifies as a nontaxable exchange under § 351. Because the property is loss property, Condor takes a basis of $120,000 in the property. Five years later, Art sells the Condor stock for $50,000. With respect to the sale, Art has:

• A) An ordinary loss of $80,000.
• B) An ordinary loss of $70,000 and a capital loss of $10,000.
• C) A capital loss of $80,000.
• D) A capital loss of $30,000 and an ordinary loss of $50,000.
• E) None of these.

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Definitions:

Universal

Pertaining to or applicable to all members of a class, group, or whole.

Metacommunication

Communication about communication, which encompasses the context, tone, and nonverbal cues that influence how the message is interpreted.

Proxemic Communication

The use of space and distance in communication to convey messages or affect interpersonal interactions.

Visual Kinesic Communication

The aspect of communication that involves body movements, facial expressions, and gestures as nonverbal cues to convey messages or emotions.