To Improve Its Liquidity, the Shareholders of Spoonbill Corporation Make

question 82

Multiple Choice

To improve its liquidity, the shareholders of Spoonbill Corporation make a capital contribution of $200,000 in cash. To facilitate the building of a manufacturing plant, the City of Wichita donates land (worth $800,000) to Spoonbill Corporation. As a result of these transactions, Spoonbill has:

• A)No income and a basis in the land of zero.
• B)Income of $1 million and a basis in the land of zero.
• C)Income of $800,000 and a basis in the land of $800,000.
• D)No income and a basis in the land of $800,000.
• E)None of the above.

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Definitions:

New Classical Economists

Economists who believe in the theory that markets are always clear and that participants have rational expectations, focusing on the supply side for economic growth.

Government Intervention

Actions taken by a government to affect the economy, which can include regulations, subsidies, and taxes.

Supply-Siders

are economists who believe that changes in marginal tax rates and the ability to supply goods in the economy significantly influence economic growth.

Work More

The concept or action of increasing the amount of effort or hours spent on labor or tasks.