Hazel Transferred the Following Assets to Starling Corporation

question 1

Multiple Choice

Hazel transferred the following assets to Starling Corporation. In exchange,Hazel received 50% of Starling Corporation's only class of stock outstanding.The stock has no established value.However,all parties sincerely believe that the value of the stock Hazel received is the equivalent of the value of the assets she transferred.The only other shareholder,Rick,formed Starling Corporation five years ago.

• A)Hazel has no gain or loss on the transfer.
• B)Starling Corporation has a basis of $48,000 in the machinery and $108,000 in the land.
• C)Starling Corporation has a basis of $36,000 in the machinery and $144,000 in the land.
• D)Hazel has a basis of $276,000 in the stock of Starling Corporation.
• E)None of the above.

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Definitions:

Autism Spectrum Disorder

A developmental disorder characterized by difficulties in social interaction and communication, along with restricted or repetitive patterns of thought and behavior.

Pervasive Developmental Disorder

A category of developmental disorders that involve delays in the development of many basic skills, often replaced by the term Autism Spectrum Disorder.

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Developmental Disabilities

A diverse group of conditions due to an impairment in physical, learning, language, or behavior areas that begin during the developmental period.