Rob and Sharon Form Swallow Corporation with the Following Consideration

question 45

Multiple Choice

Rob and Sharon form Swallow Corporation with the following consideration: Each receives 50% of Swallow's stock.In addition,Sharon receives cash of $40,000.One result of these transfers is that Sharon has a:

• A)Recognized loss of $60,000.
• B)Recognized loss of $20,000.
• C)Basis of $460,000 in the Swallow stock (assuming Swallow reduces its basis in the land to $440,000).
• D)Basis of $400,000 in the Swallow stock (assuming Swallow reduces its basis in the land to $440,000).
• E)None of the above.

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