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Maria has been operating a business as a sole proprietorship for several years. She needs additional capital and wants to incorporate her business. The assets of her business (building, land, inventory, and so on)have a $400,000 adjusted basis and a $1.5 million FMV. Maria is willing to exchange the assets for 1,500 shares of Metro Corporation stock, each having a $1,000 FMV. Bill and John are each willing to invest $500,000 in Maria's business and will each receive 500 shares of stock. Why is Sec. 351 important to Maria? Does it matter to Bill and John?
Favorable Supply Shock
An unexpected event that increases the supply of a product or service, leading to lower prices and benefiting consumers.
Price Level
A measure of the average prices of goods and services in an economy.
Central Bank
A national bank that provides financial and banking services for its country's government and commercial banking system and implements monetary policy.
Money Supply
The whole sum of economic financial assets at a specified time.
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