Amy Transfers Property with a Tax Basis of $1,455 and a Fair

question 22

Multiple Choice

Amy transfers property with a tax basis of $1,455 and a fair market value of $1,095 to a corporation in exchange for stock with a fair market value of $850 in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $245 on the property transferred. What is Amy's tax basis in the stock received in the exchange?

• A)$1,455
• B)$1,210
• C)$1,110
• D)$850

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Definitions:

Income

The money received, typically on a regular basis, for work or through investments.

Government Assistance

Programs or financial aid provided by the government to individuals, businesses, or other entities in need of support.

Deferred Gratification

The ability to resist the temptation for an immediate reward and wait for a later reward.

Paycheque

A paycheque is a check issued by an employer to pay an employee for services rendered, typically on a regular basis like weekly or monthly.