Carol Owns Target Corporation Stock Having an Adjusted Basis of $41,000

question 88

Essay

Carol owns Target Corporation stock having an adjusted basis of $41,000. As part of a Type C tax-free reorganization involving Revbo and Target Corporations, Carol exchanges her Target stock for $42,000 of Revbo stock and Revbo securities having a face amount and FMV of $8,000. What is Carol's basis in the Revbo stock?

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Definitions:

Electroencephalograph

A device used to record the electrical activity of the brain, commonly known as an EEG.

EKG

An abbreviation for electrocardiogram, a test that measures the electrical activity of the heart to detect and diagnose various heart conditions.

Positron Emission Tomography

A nuclear medicine functional imaging technique used to observe metabolic processes in the body.

Computerised Tomography

A diagnostic imaging technique that uses computer-processed combinations of multiple X-ray measurements taken from different angles to produce cross-sectional images of specific areas of a scanned object.