Tom and George Form Swan Corporation with the Following Investments

question 44

Multiple Choice

Tom and George form Swan Corporation with the following investments: Tom transfers machinery worth $100,000 (basis of $40,000) ,while George transfers land worth $90,000 (basis of $20,000) and services rendered in organizing the corporation worth $10,000.Each is issued 25 shares in Swan Corporation.With respect to the transfers:

• A)Tom has no recognized gain; George recognizes gain of $80,000.
• B)Neither Tom nor George recognizes gain.
• C)Swan Corporation has a basis of $30,000 in the land.
• D)George has a basis of $30,000 in the shares of Swan Corporation.
• E)None of the above.

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Definitions:

Satisficing

A decision-making approach that seeks a satisfactory solution rather than an optimal one.

Decision-Critical Criteria

Essential factors or standards considered vital in making a decision.

Pros And Cons

The advantages and disadvantages or positive and negative aspects of a decision, action, or situation.