When Pheasant Corporation Was Formed Under § 351, Kristen Transferred

question 63

Multiple Choice

When Pheasant Corporation was formed under § 351, Kristen transferred property (basis of $26,000 and fair market value of $22,500) for § 1244 stock. Kristen's basis in the Pheasant stock is $26,000. Three years later, Pheasant Corporation goes bankrupt and its stock becomes worthless. Kristen, who is single, owned the stock as an investment. Kristen's loss is:

• A) $26,000 capital.
• B) $22,500 ordinary and $3,500 capital.
• C) $3,500 ordinary and $22,500 capital.
• D) $26,000 ordinary.
• E) None of the above.

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Definitions:

Fraternal Polyandry

A form of marriage in which a woman is married to two or more men who are brothers, practiced in some cultures for economic and societal reasons.

Sororal Polyandry

A form of marriage in which two or more brothers are married to the same wife, specifically among sisters.

Patrilateral Parallel-cousin

A cousin from the father's side of the family who is the child of the father's brother or sister.

Group Marriage

A marriage form in which several men and women have sexual access to one another; also called co-marriage.