Carolyn Transfers Property with an Adjusted Basis of $50,000 and an FMV

question 58

Multiple Choice

Carolyn transfers property with an adjusted basis of $50,000 and an FMV of $60,000 in exchange for Prime Corporation stock in a Sec. 351 transaction. Carolyn's basis in the stock is

• A)$60,000.
• B)$50,000.
• C)$10,000.
• D)$0.

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Definitions:

Underwater

Underwater refers to being submerged in water, or to the condition of owing more on a loan than the value of the property securing it.

Primacy Effect

A cognitive bias that results in a person remembering the first pieces of information encountered better than information presented later on.

Interviewed

The process of asking questions and obtaining answers from someone, especially for research or journalistic purposes.

Retrograde Amnesia

An inability to retrieve information from one’s past.