Mary Transfers a Building (Adjusted Basis of $15,000 and Fair

question 42

Multiple Choice

Mary transfers a building (adjusted basis of $15,000 and fair market value of $90,000) to White Corporation. In return, Mary receives 80% of White Corporation's stock (worth $65,000) and an automobile (fair market value of $5,000) . In addition, there is an outstanding mortgage of $20,000 (taken out 15 years ago) on the building, which White Corporation assumes. With respect to this transaction:

• A) Mary's recognized gain is $10,000.
• B) Mary's recognized gain is $5,000.
• C) Mary has no recognized gain.
• D) White Corporation's basis in the building is $15,000.
• E) None of the above.

---

Definitions:

Global Issues

Global issues refer to challenges and concerns that affect countries and populations worldwide, such as climate change, poverty, and international conflicts.

Classification System

A method for organizing data or objects into categories based on shared characteristics.

Job Evaluation

A systematic process for assessing the relative worth of jobs within an organization to establish a fair and equitable pay structure.

Compensation

Is the set of rewards that organizations provide to individuals in return for their willingness to perform various jobs and tasks within the organization.