Rick Transferred the Following Assets and Liabilities to Warbler Corporation

question 16

Multiple Choice

Rick transferred the following assets and liabilities to Warbler Corporation.
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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:

Oval Corn Pads

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Nasogastric Tube

A flexible tube that is inserted through the nose into the stomach, primarily used for feeding or removing substances from the stomach.

Oral Hygiene

The practice of keeping the mouth, teeth, and gums clean and healthy to prevent disease.

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A common and mild form of gum disease (periodontal disease) that causes irritation, redness, and swelling (inflammation) of your gingiva, the part of your gum around the base of your teeth.