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:

Tracers

Substances used in medical and biological research to track the passage of substances through systems.

Biological Processes

Complex sequences of actions or changes happening in living organisms, necessary for their survival, growth, and reproduction.

Ionic Bond

A chemical bond formed between two atoms when one atom transfers an electron to another, leading to the attraction between positively and negatively charged ions.

Hydrogen Bond

An insubstantial attachment between two molecules produced by the electrostatic allure between a proton of one molecule and an electronegative atom of the other.