Joe and Kay Form Gull Corporation

question 44

Multiple Choice

Joe and Kay form Gull Corporation.Joe transfers cash of $250,000 for 200 shares in Gull Corporation.Kay transfers property with a basis of $50,000 and fair market value of $240,000.She agrees to accept 200 shares in Gull Corporation for the property and for providing bookkeeping services to the corporation in its first year of operation.The value of Kay's services is $10,000.With respect to the transfer:

• A)Gull Corporation has a basis of $240,000 in the property transferred by Kay.
• B)Neither Joe nor Kay recognizes gain or income on the exchanges.
• C)Gull Corporation has a business deduction under § 162 of $10,000.
• D)Gull capitalizes $10,000 as organizational costs.
• E)None of the above.

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Definitions:

Progressive Human Resource Management

Innovative and forward-thinking practices in managing an organization's human resources, focusing on employee development and organizational improvement.

Innovative Staff

Employees who demonstrate creativity and the ability to generate novel ideas or solutions, contributing to the growth and development of the organization.

Pioneering Culture

A pioneering culture in an organization emphasizes innovation, risk-taking, and being the first to market with new ideas or products.

Human Resource Audits

A comprehensive review of an organization's HR policies, practices, and systems to ensure compliance, effectiveness, and alignment with strategic goals.