Kim Owns 100% of the Stock of Cardinal Corporation

question 83

Multiple Choice

Kim owns 100% of the stock of Cardinal Corporation. In the current year Kim transfers an installment obligation, tax basis of $30,000 and fair market value of $200,000, for additional stock in Cardinal worth $200,000.

• A) Kim recognizes no taxable gain on the transfer.
• B) Kim has a taxable gain of $170,000.
• C) Kim has a taxable gain of $180,000.
• D) Kim has a basis of $200,000 in the additional stock she received in Cardinal Corporation.
• E) None of the above.

---

Definitions:

Tibial Nerve

A major peripheral nerve of the lower leg that innervates the muscles of the calf and foot, as well as the skin of the lower leg.

Common Fibular Nerve

A nerve in the lower limb that branches from the sciatic nerve, involved in motor and sensory functions of the leg and foot.

Cervical Plexus

A network of nerves formed by the anterior rami of the first four cervical spinal nerves, which supply motor and sensory innervation to the neck, shoulders, and upper chest.

Phrenic Nerve

The Phrenic Nerve is a nerve that runs from the neck to the diaphragm, playing a crucial role in breathing by controlling the diaphragm's movements.