Amy Transfers Property with a Tax Basis of $900 and a Fair

question 46

Multiple Choice

Amy transfers property with a tax basis of $900 and a fair market value of $600 to a corporation in exchange for stock with a fair market value of $450 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $150 on the property transferred. What is Amy's tax basis in the stock received in the exchange?

• A)$900
• B)$750
• C)$650
• D)$450

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Definitions:

Placebos

Substances with no therapeutic effect that are used in clinical trials as a control to test the effectiveness of treatments.

Nocebo Effect

Adverse effect of a placebo.

Negative Effect

An adverse or undesirable outcome resulting from a particular action or condition.

Placebo Study

A research experiment in which the effects of a substance or treatment are compared with those of a placebo, a harmless pill or procedure, to assess the treatment's effectiveness.