Camille Transfers Property with a Tax Basis of $800 and a Fair

question 111

Multiple Choice

Camille transfers property with a tax basis of $800 and a fair market value of $1,200 to a corporation in exchange for stock with a fair market value of $850 and $350 in cash in a transaction that qualifies for deferral under section 351. Camille also incurred selling expenses of $100. What is the amount realized by Camille in the exchange?

• A)$1,200
• B)$1,100
• C)$850
• D)$750

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Definitions:

Present Value Factors

A factor used to calculate the present value of a future amount, considering the time value of money and interest rates.

Bond Carrying Value

The net book value of a bond on the issuer's balance sheet, calculated as the bond's face value minus any unamortized discounts or plus any unamortized premiums.

Bond Carrying Value

The net amount at which a bond is reported on the balance sheet, including its face value adjusted for any discounts, premiums, and interest.

Effective Yield

The total yield, or return, on an investment that takes into account the effect of compounding interest, as opposed to just the nominal rate.