Max Transfers the Following Properties to a Newly Created Corporation

question 28

Multiple Choice

Max transfers the following properties to a newly created corporation for $90,000 of stock and $10,000 cash in a transaction that qualifies under Sec.351. Max's recognized gain is

• A) $3,000.
• B) $5,000.
• C) $7,000.
• D) $10,000.

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Definitions:

Revenue Enhancement

Strategies or actions taken to increase the amount of income generated from business operations.

Merger

A strategic corporate action where two or more entities combine their operations to form a new organization or become part of an existing one.

Tender Offer Takeovers

An acquisition strategy where the bidder offers to purchase shares from shareholders directly at a specified price, typically at a premium over the market price.

Gains

The financial increase obtained from an investment or transaction, exceeding the initial cost or investment.