Harry Forms the Nectarine Corporation During the Current Tax Year

question 33

Multiple Choice

Harry forms the Nectarine Corporation during the current tax year.To form the corporation, Harry transfers assets having a fair market value of $650,000 to Nectarine Corporation for 100 percent of the corporation's stock.Harry's adjusted basis in the assets transferred was $375,000 and Nectarine Corporation assumed a $200,000 mortgage on the assets.If the fair market value of the stock received by Harry is $450,000, what is his basis in the stock received from the corporation?

• A)$175,000
• B)$200,000
• C)$375,000
• D)$450,000
• E)None of the above

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Definitions:

Premise

An assertion or proposition which forms the basis for a work's conclusion; in logic, it is the antecedent of an argument.

Simp

A slang term often used to describe someone who performs excessive subservience or attention to another person, typically someone they're interested in, often disregarding their own needs or dignity.

MP

Short for Modus Ponens, a form of argument in logic where if the first statement is true, then the second statement must also be true (If P, then Q. P, therefore Q).

Simp

An internet slang term derogatorily used to describe someone who is perceived as overly submissive or attentive to someone else, often without receiving any attention or affection in return.