Zeppo and Harpo Are Equal Owners of the Marx Corporation

question 12

Multiple Choice

Zeppo and Harpo are equal owners of the Marx Corporation. During the current year, they agree to admit Groucho as a shareholder. Groucho will contribute $35,000 in cash and property worth $75,000 (adjusted basis of $55,000) for 40% of Marx Corporation's stock. How much gain will Groucho recognize from the transfer of the assets to the corporation?

• A)$-0-
• B)$20,000
• C)$35,000
• D)$55,000
• E)$75,000

---

Definitions:

Head-to-head Positioning

A marketing strategy where a company positions its products to directly compete with rival products in the market.

Technologically Advanced

Describes products, services, or systems that incorporate the latest technological developments.

Marketing Synergies

involve leveraging multiple marketing strategies and channels in a coordinated way to achieve greater impacts than could be achieved separately.

Cost Savings

The reduction in expenses achieved through efficient management, budgeting, or purchasing strategies, contributing to increased profitability.