Broom Corporation Transfers Assets with an Adjusted Basis of $300,000

question 42

Multiple Choice

Broom Corporation transfers assets with an adjusted basis of $300,000 and an FMV of $400,000 to Docker Corporation in exchange for $400,000 of Docker Corporation stock as part of a tax-free reorganization.The Docker stock had been purchased from its shareholders one year earlier for $350,000.How much gain do Broom and Docker Corporations recognize on the asset transfer?

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Definitions:

Mindfulness

A mental state achieved by focusing one's awareness on the present moment, while calmly acknowledging and accepting one's feelings, thoughts, and bodily sensations.

Uneducated Audience

A group of people or demographic segment lacking formal education or specific knowledge in a certain area.

One-sided Message

Communication that presents a single viewpoint or aspect of an issue, often used in persuasive settings.

Central Route

A method of persuasion that involves deeply processing the content of a message, considering its arguments and evidence.