Isabella and Marta Form Pine Corporation

question 70

True/False

Isabella and Marta form Pine Corporation. Isabella transfers land (basis of $40,000 and fair market value of $180,000) for 50 shares plus $20,000 cash, while Marta transfers $160,000 cash for the other 50 shares in Pine Corporation. Pine Corporation has a basis of $40,000 in the land it receives from Isabella.

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Definitions:

Reward Model of Liking

A psychological theory suggesting that positive responses and reinforcements from others can lead to preferences and liking for certain stimuli or individuals.

Positive Stimuli

Items or events that evoke a favorable psychological response, often associated with pleasure, happiness, or motivation.

Dislike

A feeling of aversion or lack of positive sentiment toward something or someone.

Short-term Relationship

A romantic or sexual relationship that is not intended or expected to last a long time.