Jerry Transfers Two Assets to a Corporation as Part of a Sec

question 93

Multiple Choice

Jerry transfers two assets to a corporation as part of a Sec. 351 exchange. The first asset has an adjusted basis of $70,000 and an FMV of $50,000. The second asset has an adjusted basis of $70,000 and an FMV of $150,000. The FMV of the stock received is $180,000, and he also receives $20,000 cash. The realized and recognized gain on the second asset is

• A)$80,000 realized; $20,000 recognized.
• B)$80,000 realized; $15,000 recognized.
• C)$20,000 realized; $10,000 recognized.
• D)$10,000 realized; $10,000 recognized.

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Definitions:

Measurement

The process of determining the size, quantity, or degree of something, often in relation to a unit of measurement.

Financial Reporting Periods

are the specific time frames covered by financial reports, often annually or quarterly, over which an organization reports its financial performance and position.

Early Adoption

Early adoption refers to the implementation of new accounting standards or regulations before the mandatory effective date prescribed by the regulatory bodies.

Reportable Segments

Operating segments for which an entity reports separate information.