Mary Transfers a Building (Adjusted Basis of $15,000 and Fair

question 42

Multiple Choice

Mary transfers a building (adjusted basis of $15,000 and fair market value of $90,000) to White Corporation. In return, Mary receives 80% of White Corporation's stock (worth $65,000) and an automobile (fair market value of $5,000) . In addition, there is an outstanding mortgage of $20,000 (taken out 15 years ago) on the building, which White Corporation assumes. With respect to this transaction:

• A) Mary's recognized gain is $10,000.
• B) Mary's recognized gain is $5,000.
• C) Mary has no recognized gain.
• D) White Corporation's basis in the building is $15,000.
• E) None of the above.

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Definitions:

Earlier Stage

A phase or period that takes place at the beginning of a process or sequence.

Development

Development refers to the process of change and growth that occurs in living organisms, including physical, cognitive, and social-emotional progress over time.

Regression

A return to an earlier or less developed state, often in psychology referring to the adoption of behaviors not typical of the current developmental stage.

Memory

The cognitive function that allows information to be stored, retained, and recalled from the past.