Carl Transfers Land to Cardinal Corporation for 90% of the Stock

question 17

Multiple Choice

Carl transfers land to Cardinal Corporation for 90% of the stock in Cardinal Corporation worth $20,000 plus a note payable to Carl in the amount of $40,000 and the assumption by Cardinal Corporation of a mortgage on the land in the amount of $100,000. The land, which has a basis to Carl of $70,000, is worth $160,000.

• A) Carl will have a recognized gain on the transfer of $90,000.
• B) Carl will have a recognized gain on the transfer of $30,000.
• C) Cardinal Corporation will have a basis in the land transferred by Carl of $70,000.
• D) Cardinal Corporation will have a basis in the land transferred by Carl of $160,000.
• E) None of the above.

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Definitions:

Population Standard Error

An estimate of how much the sample mean deviates from the actual population mean.

Confidence Interval

An assortment of values, taken from statistical sampling, that is designed to contain the value of a population parameter yet to be identified.

Population Mean

The average value of a characteristic in a population, representing the central tendency of the population data.

Confidence Interval

A confidence interval is a range of values, derived from sample statistics, that is likely to contain the value of an unknown population parameter at a given confidence level.