Key Corporation Distributes a Patent with an Indeterminable Value to Gary

question 62

Multiple Choice

Key Corporation distributes a patent with an indeterminable value to Gary as part of a plan of complete liquidation. In addition, Gary receives $40,000 cash and land with a $70,000 FMV and a $30,000 adjusted basis. Gary's basis in the Key stock (a capital asset) surrendered is $120,000. If Gary relies on the open transaction doctrine, at the liquidation date he must recognize a

• A)$0 gain.
• B)$10,000 capital loss.
• C)$30,000 capital loss.
• D)$70,000 capital gain.

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Definitions:

Hygiene Factors

Factors related to the work environment that can lead to job dissatisfaction if absent, such as salary, company policies, working conditions, and job security.

Job Satisfaction

The degree to which an individual feels positive or negative about a job.

Herzberg

Refers to Frederick Herzberg, a psychologist who is best known for introducing the two-factor theory of motivation, distinguishing between hygiene factors and motivators.

McClelland's View

refers to David McClelland's theory that human motivation is primarily driven by three needs: achievement, power, and affiliation.