Beth Transfers an Asset Having an FMV of $200,000 and an Adjusted

question 85

Multiple Choice

Beth transfers an asset having an FMV of $200,000 and an adjusted basis of $150,000 to ABC Corporation in a Sec. 351 transaction. Beth receives in exchange ABC common stock having an FMV of $175,000 and Zeus Corporation common stock (a capital asset) having an FMV of $25,000 and a basis of $10,000 to ABC Corporation. ABC Corporation must recognize

• A)no gain.
• B)a $15,000 capital gain.
• C)a $25,000 capital gain.
• D)a $50,000 capital gain.

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Definitions:

Aggregate Planning

A process in operations management aiming to determine an optimal production plan to meet fluctuating demand in the medium term while minimizing costs.

Subcontracting

The practice of assigning part of the obligations and tasks under a contract to another party, often to specialize in particular tasks or save on costs.

Inventory

Describes the goods and materials that a business holds for the ultimate goal of resale or production.

Overtime

Additional hours worked beyond the standard working hours, often resulting in higher pay rates.