Mr Ricardo Exchanged 75 Shares of Haslet Common Stock for 516

question 70

Multiple Choice

Mr. Ricardo exchanged 75 shares of Haslet common stock for 516 shares of Newland common stock pursuant to a reorganization of the two corporations. His basis in the Haslet stock was $49,200, and the fair market value of the Newland stock was $138,000. Which of the following statements about the exchange is true?

• A) Mr. Ricardo recognizes no gain and takes a $138,000 basis in the Newland stock.
• B) Mr. Ricardo recognizes an $88,800 gain and takes a $138,000 basis in the Newland stock.
• C) Mr. Ricardo recognizes no gain and takes a zero basis in the Newland stock.
• D) Mr. Ricardo recognizes no gain and takes a $49,200 basis in the Newland stock.

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Definitions:

Medications

Substances used to diagnose, treat, or prevent illness and aid in the maintenance of health.

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The consideration or contemplation of ending one's own life.

Depression

A mental health disorder characterized by persistently depressed mood or loss of interest in activities, causing significant impairment in daily life.

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The legal dissolution of a marriage by a court or other competent body.