Roscoe Receives Real Estate Appraised at $200,000 and Cash of $10,000

question 26

Multiple Choice

Roscoe receives real estate appraised at $200,000 and cash of $10,000 from Cathy in exchange for Roscoe's investment realty with a basis of $170,000. Roscoe plans to hold the new realty for investment. What is the amount realized for the property given up by Roscoe?

• A)$160,000
• B)$170,000
• C)$190,000
• D)$200,000
• E)$210,000

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Definitions:

Four Rights

Refers to essential rights typically envisioned in legal and ethical contexts, though the specific "four rights" can vary based on the doctrine or principle being discussed.

Watered Stock

Shares of a company that are issued at a value much greater than the assets of the company, leading to an inflation of the company's value on paper.

Fair Market Value

The price at which property would sell for on the open market between a willing buyer and a willing seller, both having reasonable knowledge of all relevant facts.

Corporate Opportunity

A business opportunity that a company must offer to its shareholders or members before taking it for personal gain.