Max Transfers the Following Properties to a Newly Created Corporation

question 79

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:

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and products that are close substitutes, leading to price competition and efficiency.

Output

The quantity of goods or services produced by a company, industry, or country within a specific period.

Economic Inefficiency

A situation in which resources are not used in the most effective way, leading to potential losses in productivity or value.

Consumer Preferences

The specific desires, likes, and dislikes that influence the purchasing behavior of consumers.