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:

Appeal To Force

A logical fallacy where one tries to win an argument by using threats or force instead of persuasion.

Fallacy

A flaw or error in reasoning that undermines the logical validity of an argument.

Sanctions

Penalties or other forms of enforcement used to encourage compliance with laws, regulations, or rules.

Subjectivism

The philosophical stance that reality or knowledge is subjective, depending on the individual's perceptions or feelings.