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Marty Is a Party to a Tax-Free Reorganization

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Marty is a party to a tax-free reorganization. He has a basis of $22,000 in his Van Corporation stock that has an FMV of $35,000. Marty exchanges the Van stock for Young Corporation stock worth $29,000 and Young securities with a face amount of $7,000 and an FMV of $6,000. What is Marty's basis in the Young securities?


Definitions:

Cultural Competence

The ability of an individual or organization to interact effectively with people of different cultures and socio-economic backgrounds.

Transference Response

A psychological phenomenon where feelings, desires, and expectations of one person are redirected and applied to another person.

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A concept in client-centered therapy suggesting therapists should offer their clients acceptance and support regardless of what the client says or does.

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A psychoanalytic technique in which a patient says whatever comes to mind without censorship as a way of uncovering unconscious thoughts and feelings.

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