Rick Transferred the Following Assets and Liabilities to Warbler Corporation

question 30

Multiple Choice

Rick transferred the following assets and liabilities to Warbler Corporation. In return,Rick received $75,000 in cash plus 90% of Warbler Corporation's only class of stock outstanding (fair market value of $225,000) .

• A) Rick has a recognized gain of $60,000.
• B) Rick has a recognized gain of $75,000.
• C) Rick's basis in the stock of Warbler Corporation is $270,000.
• D) Warbler Corporation has the same basis in the assets received as Rick does in the stock.
• E) None of the above.

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Definitions:

Providing Food

Providing food involves supplying or making food available to individuals, often essential for survival and health.

Shelter

A place providing temporary or permanent protection and accommodation, especially for people in immediate need or distress.

Theories

Systematic sets of ideas or principles designed to explain certain phenomena or observed facts.

Marriage

A legally recognized union between two individuals in personal relationship, typically signifying cultural, religious, or social bonds.