Roberta Transfers Property with a Tax Basis of $406 and a Fair

question 121

Multiple Choice

Roberta transfers property with a tax basis of $406 and a fair market value of $598 to a corporation in exchange for stock with a fair market value of $345 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $253 on the property transferred. What is the amount realized by Roberta in the exchange?

• A)$598
• B)$406
• C)$345
• D)$299

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Definitions:

Decrease Ratio

A financial metric that quantifies the reduction in a particular variable or metric relative to another, often used to assess performance or efficiency decline.

Transactions

A series of financial activities or exchanges between parties that can affect the accounting records of a business.

Prepaid Insurance

Insurance premiums paid in advance by a company, recorded as an asset on the balance sheet until the coverage period comes into effect.

Depreciation Expense

The allocated portion of the cost of a company's fixed assets that is written off each year, reflecting the asset's usage and wear and tear.