Ralph Transfers Property with an Adjusted Basis of $65,000 and an FMV

question 29

Multiple Choice

Ralph transfers property with an adjusted basis of $65,000 and an FMV of $70,000 to Lake Corporation in a Sec. 351 transaction. Ralph receives stock worth $60,000 and a short-term note having a $10,000 FMV. Ralph's basis in the stock is

• A)$75,000.
• B)$70,000.
• C)$65,000.
• D)$60,000.

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Definitions:

Contingency Theory

A leadership theory that suggests the effectiveness of a leader's style is contingent on the context and task at hand.

Situation Favorability

The degree to which circumstances or conditions are beneficial or advantageous for a specific purpose or action.

Position Power

The authority and influence a person holds in an organization by virtue of the position they occupy.

Task Motivated

Refers to individuals or leaders who are primarily focused on completing tasks and achieving goals.