Tom and George Form Swan Corporation with the Following Investments

question 3

Multiple Choice

Tom and George form Swan Corporation with the following investments: Tom transfers machinery worth $100,000 (basis of $40,000) , while George transfers land worth $90,000 (basis of $20,000) and services rendered in organizing the corporation worth $10,000.Each is issued 25 shares in Swan Corporation.With respect to the transfers:

• A)Tom has no recognized gain; George recognizes gain/income of $80,000.
• B)Neither Tom nor George recognizes gain or income.
• C)Swan Corporation has a basis of $30,000 in the land.
• D)George has a basis of $30,000 in the shares of Swan Corporation.
• E)None of the above.

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Definitions:

Depression

A psychological condition marked by an ongoing low mood or a lack of enthusiasm for activities, which greatly disrupts everyday functioning.

Mania

A mental health condition characterized by periods of extremely elevated mood, energy, and unusual or erratic behaviors.

Divalproex

A medication used in the treatment of epilepsy, bipolar disorder, and prevention of migraine headaches, functioning as a mood stabilizer.

Bipolar Symptoms

Refer to the range of signs associated with bipolar disorder, including severe mood swings that range from depressive lows to manic highs.