Rick Transferred the Following Assets and Liabilities to Warbler Corporation

question 108

Multiple Choice

Rick transferred the following assets and liabilities to Warbler Corporation. In return, Rick received $75,000 in cash plus 90% of Warbler Corporation's only class of stock outstanding (fair market value of $225,000) .

• A)Rick has a recognized gain of $60,000.
• B)Rick has a recognized gain of $75,000.
• C)Rick's basis in the stock of Warbler Corporation is $270,000.
• D)Warbler Corporation has the same basis in the assets received as Rick does in the stock.
• E)None of these.

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Definitions:

Trusting Relationships

Bonds between individuals or groups characterized by confidence, reliability, and mutual respect, often fundamental for successful cooperation.

Delegate

In organizational contexts, to assign responsibility or authority from one person to another to carry out specific activities, while the original person retains the final accountability for the outcome.

Group Development Process

A sequence of stages through which a group passes as it forms, starts to work together, matures in its relationships and activities, and possibly dissolves.

Conflict

A situation or process in which there is a disagreement, opposition, or clash between ideas, interests, or parties.