Kathleen Transferred the Following Assets to Mockingbird Corporation

question 27

Multiple Choice

Kathleen transferred the following assets to Mockingbird Corporation. In exchange, Kathleen received 40% of Mockingbird Corporation's only class of stock outstanding.The stock has no established value.However, all parties sincerely believe that the value of the stock Kathleen received is the equivalent of the value of the assets she transferred.The only other shareholder, Rick, formed Mockingbird Corporation five years ago.

• A)Kathleen has no gain or loss on the transfer.
• B)Mockingbird Corporation has a basis of $48,000 in the equipment and $108,000 in the land.
• C)Kathleen has a basis of $256,000 in the stock of Mockingbird Corporation.
• D)Mockingbird Corporation has a basis of $36,000 in the equipment and $144,000 in the land.
• E)None of the above.

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Definitions:

Axon Terminals

The distal terminations of the branches of an axon, responsible for releasing neurotransmitters to signal adjacent neurons.

Parasympathetic

Part of the autonomic nervous system responsible for rest and digest functions, counterbalancing the fight-or-flight responses.

Nervous System

The network of nerve cells and fibers that transmits nerve impulses between parts of the body, enabling communication between the brain, spinal cord, and other areas.

Action Potential

A temporary reversal of the electrical polarization of the membrane of a nerve cell or muscle cell, primarily involved in the transmission of nerve impulses.