Mr Big, a Nonshareholder, Who Is Not a Customer, Potential

question 122

Multiple Choice

Mr. Big, a nonshareholder, who is not a customer, potential customer, governmental entity, or civic group, contributes $60,000 cash and land worth $100,000 to induce Carrie Corporation to relocate to his municipality. Carrie Corporation spent $50,000 of the cash within the first 12 months of his contribution to purchase machinery. The contribution results in

• A)Carrie Corporation recognizes no income as a result of the contribution, the land and machinery have a basis of zero.
• B)Carrie Corporation recognizes $160,000 of income.
• C)Carrie Corporation recognizes no income as a result of the contribution, the land has a basis of zero, and the machinery has a basis of $50,000.
• D)Carrie Corporation recognizes no income as a result of the contribution, the land has a basis of $100,000, and the machinery has a basis of $60,000.

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Definitions:

Phylum

A phylum is a major taxonomic category in the classification of living organisms, ranking above class and below kingdom, grouping together organisms with a shared body plan or significant similarities in structure or ancestry.

Taxonomic Category

A level or rank in the system of classifying organisms, such as species, genus, family, etc., used in biological classification to organize the diversity of life.

Family

A social unit of individuals related by blood, marriage, or adoption, living together or maintaining close emotional ties.

Transcription

The process of conversion of instructions from DNA into RNA.