Maria Defers $100 of Gain Realized in a Section 351

question 108

True/False

Maria defers $100 of gain realized in a section 351 transaction.The stock she receives in the exchange has a fair market value of $500.Maria's tax basis in the stock will be $400.

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Definitions:

Preexisting Duty

An obligation that a party is already bound to by law or by some other agreement. The party may not use this as consideration in a new contract.

Promissory Estoppel

A judicial principle that stops one from retracting a pledge given to another if the latter has justifiably depended on the promise to their disadvantage.

Disputed Amounts

Refers to the sums of money under contention between parties in transactions or contracts, often leading to negotiation or legal actions.

Satisfaction

The agreed-to settlement as contained in an accord.