Kornek Inc

question 54

Multiple Choice

Kornek Inc. transferred an old asset with a $200,000 adjusted tax basis plus $12,000 cash in exchange for a new asset worth $260,000. Which of the following statements is false?

• A) If the exchange is taxable, Kornek recognizes a $48,000 gain.
• B) If the exchange is nontaxable, Kornek recognizes a $12,000 gain.
• C) If the exchange is nontaxable, Kornek's tax basis in the new asset is $212,000.
• D) None of these statements is false.

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Definitions:

Carbonic Anhydrase

An enzyme that catalyzes the conversion of carbon dioxide and water into bicarbonate and protons, critical for maintaining acid-base balance in blood and tissues.

Tidal Volume

The volume of air that is inhaled or exhaled in a single breath during normal breathing.

Pleural Cavity

The slim space between the lungs and the chest wall, containing a small amount of lubricating fluid.

Pleural Membranes

Thin layers of tissue that line the thoracic cavity and envelope the lungs, aiding in respiration by facilitating lung expansion and contraction.