Under the Terms of Their Divorce Agreement,Humphrey Transferred Corporation H

question 92

Multiple Choice

Under the terms of their divorce agreement,Humphrey transferred Corporation H stock to his former wife,Greta,as a property settlement.At the time of the transfer,the stock had a basis to Humphrey of $40,000 and a fair market value of $55,000.What is the tax consequence of this transaction to Humphrey,and what is Greta's basis in the Corporation H stock?

• A)Humphrey has no gain or loss; Greta's basis is $55,000.
• B)Humphrey has no gain or loss; Greta's basis is $40,000.
• C)Humphrey has a gain of $15,000; Greta's basis is $55,000.
• D)Humphrey has a gain of $15,000; Greta's basis is $40,000.

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