Jacob and Ashley Form Junco Corporation with the Following Investments

question 185

Multiple Choice

Jacob and Ashley form Junco Corporation with the following investments:
From Jacob
From Ashley
Cash
$200,000
Equipment (basis of $400,000;fair market value of $300,000)
300,000
Land (basis of $300,000;fair market value of $600,000)
$600,000
​
Jacob and Ashley each receive one-half of the Junco stock.In addition,Ashley receives cash of $100,000.One of the results of these transfers is:

• A)Jacob has a recognized loss of $100,000.
• B)Ashley has a recognized gain of $300,000.
• C)Junco Corporation has a basis in the land of $400,000.
• D)Ashley's basis in the Junco Corporation stock is $500,000.
• E)None of the above.

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Definitions:

Endocrine System

A network of glands in the body that secrete hormones into the bloodstream to regulate various bodily functions.

Chemical Messengers

Compounds such as hormones and neurotransmitters that transmit signals from one cell or organism to another, affecting physiological activities.

Hormones

Chemical messengers produced by endocrine glands that regulate various bodily functions and processes.

Sympathetic Nervous System

A part of the autonomic nervous system that prepares the body for action by accelerating the heart rate, constricting blood vessels, and raising blood pressure.