During 2016,Jimmy Incorporates His Data Processing Business

question 47

Multiple Choice

During 2016,Jimmy incorporates his data processing business.Jimmy is the sole shareholder.The following assets are transferred to the corporation:
Cash $2,000
Computer Equipment:
Fair market value 20,000
Adjusted basis 12,000
Original cost 24,000
Furniture:
Fair market value 20,000
Adjusted basis 32,000
Original cost 64,000
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What will be the basis of the assets to the corporation after the transfer?
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Computer Equipment Furniture

• A)$20,000 $20,000
• B)$12,000 $20,000
• C)$20,000 $32,000
• D)$12,000 $32,000
• E)$24,000 $64,000

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Definitions:

Guarantee

A formal assurance that certain conditions will be fulfilled, often related to the quality of a product or service.

Rationalization

Rationalization is a defense mechanism in which controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation.

Chronic Use

The long-term, persistent use of a substance or engagement in a behavior, often leading to dependency or addiction.

Inadequacy

The feeling or state of being insufficient or not good enough to meet a standard or fulfill a need.