During 2016,Jimmy Incorporates His Data Processing Business

question 48

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
​
How much gain (loss) will Jimmy recognize from the transfer of the assets to the corporation?

• A)$-0-
• B)$(4,000)
• C)$8,000
• D)$20,000
• E)$(12,000)

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Definitions:

Evaluate

To calculate the numerical value or simplify an expression.

Calculator

An electronic or mechanical device used to perform mathematical calculations ranging from basic arithmetic to complex equations.

Simplify

The process of reducing an expression to its most compact or simplest form without changing its value.

Expression

An arrangement of symbols representing a value or denoting a mathematical operation, without an equality sign.