A Shareholder Bought 2,000 Shares of Zee Corporation for $90,000

question 23

Multiple Choice

A shareholder bought 2,000 shares of Zee Corporation for $90,000 several years ago.When the stock is valued at $200,000,Zee redeems these shares in exchange for 6,000 shares of Yea Corporation stock.This transaction meets the requirements of § 368.Which of the following statements is true with regard to this transaction?

• A)The shareholder has a recognized gain of $110,000.
• B)The shareholder has a postponed gain of $110,000.
• C)The shareholder has a basis in the Yea stock of $200,000.
• D)Gain or loss cannot be determined because the value of the Yea stock is not given.
• E)None of the above are true.

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Definitions:

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Plagiarism

The act of using someone else's work or ideas without giving proper credit, thereby presenting it as one's own.

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The act of briefly presenting the main points or essence of a longer text or speech in a concise form.

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the act of expressing the meaning of something written or spoken using different words, especially to achieve greater clarity.