Rob and Fran Form Bluebird Corporation with the Following Investments

question 55

Multiple Choice

Rob and Fran form Bluebird Corporation with the following investments. Each receives 50% of Bluebird's stock. In addition, Fran receives cash of $40,000. One result of these transfers is that Fran has a:

• A) Recognized loss of $60,000.
• B) Recognized loss of $20,000.
• C) Basis of $460,000 in the Bluebird stock (assuming Bluebird reduces its basis in the land to $440,000).
• D) Basis of $400,000 in the Bluebird stock (assuming Bluebird reduces its basis in the land to $440,000).
• E) None of the above.

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Definitions:

Veins Inflammation

Also known as phlebitis, a medical condition characterized by the inflammation of the veins, leading to pain and swelling.

Artery Wall

The multilayered structure of arteries, designed to withstand high pressure from heartbeats and effectively transport blood away from the heart.

Subclavian Artery

A major artery that supplies blood to the head and arms.

Blood Pressure

The force of circulating blood on the walls of blood vessels, often measured as systolic over diastolic pressure.