Eileen Transfers Property Worth $200,000 (Basis of $60,000)to Goldfinch Corporation

question 68

Multiple Choice

Eileen transfers property worth $200,000 (basis of $60,000) to Goldfinch Corporation.In return,she receives 80% of the stock in Goldfinch Corporation (fair market value of $180,000) and a long-term note (fair market value of $20,000) executed by Goldfinch and made payable to Eileen.Eileen recognizes gain on the transfer of:

• A)$0.
• B)$20,000.
• C)$60,000.
• D)$140,000.
• E)None of the above.

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Definitions:

Sales

The total amount of goods or services sold by a company within a specific period, generating revenue.

Standard Bikes

Refers to bicycles that adhere to specific industry norms and standards, typically meant for average or typical use scenarios.

Fixed Costs

Costs that do not vary with the level of output or sales over the short term, such as rent or salaries.

Variable Costs

Costs that vary in direct proportion to changes in production or sales volume, such as materials and labor.