Carlos Transfers Property with a Tax Basis of $500 and a Fair

question 2

Multiple Choice

Carlos transfers property with a tax basis of $500 and a fair market value of $800 to a corporation in exchange for stock with a fair market value of $650 and $50 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $100 on the property transferred. What is the corporation's tax basis in the property received in the exchange?

• A)$800
• B)$600
• C)$550
• D)$450

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Definitions:

Group Influence

The impact or effect that a group has on the attitudes, values, beliefs, or behaviors of its individual members.

Legitimate Power

A form of authority that is recognized and accepted due to the role or position held by an individual within an organization.

Manager Authority

The power vested in a managerial position to make decisions, give orders, and manage resources within an organization.

Employee Behavior

The actions and conduct of individuals within a workplace, influenced by various factors including personality, culture, and the work environment.