Tom and George Form Swan Corporation with the Following Investments

question 3

Multiple Choice

Tom and George form Swan Corporation with the following investments: Tom transfers machinery worth $100,000 (basis of $40,000) , while George transfers land worth $90,000 (basis of $20,000) and services rendered in organizing the corporation worth $10,000.Each is issued 25 shares in Swan Corporation.With respect to the transfers:

• A)Tom has no recognized gain; George recognizes gain/income of $80,000.
• B)Neither Tom nor George recognizes gain or income.
• C)Swan Corporation has a basis of $30,000 in the land.
• D)George has a basis of $30,000 in the shares of Swan Corporation.
• E)None of the above.

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Definitions:

Methodists

Members of a Christian denomination known for its emphasis on personal faith, social justice, and the teaching of John Wesley.

Strictly Enforced Rules

Rules or regulations that are rigorously upheld and imposed to ensure compliance.

Society

A structured community of people bound together by similar traditions, institutions, or nationality.

Sects

Relatively small religious groups that have branched off from a larger religion, often with distinct beliefs and practices diverging from mainstream traditions.