Rob and Sharon Form Swallow Corporation with the Following Consideration

question 39

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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Definitions:

Language Acquisition

The process by which humans acquire the capacity to perceive, produce, and understand language, usually occurring in early childhood.

Nuclear Families

A family group consisting of two parents and their children (biological or adopted).

Extended Families

A family unit that extends beyond the nuclear family to include other relatives such as grandparents, aunts, uncles, and cousins.

Middle Adulthood

A stage of life typically ranging from about 40 to 65 years of age, characterized by stability in relationships, career, and health, though also marked by the onset of aging.