Carlos Transfers Property with a Tax Basis of $500 and a Fair

question 42

Multiple Choice

Carlos transfers property with a tax basis of $500 and a fair market value of $800 to a corporation in exchange for stock with a fair market value of $650 and $50 cash in a transaction that qualifies for deferral under section 351.The corporation assumed a liability of $100 on the property transferred.What is the corporation's tax basis in the property received in the exchange?

• A)$800.
• B)$600.
• C)$550.
• D)$450.

---

Definitions:

Sale of Business

The process or transaction in which ownership of a business is transferred from one party to another.

Breach of Contract

The violation of any terms or conditions in a contract without legal justification.

Valid License

An official permission or permit that meets all legal requirements to engage in a particular activity or profession.

Employment Agreement

An official document outlining the terms and conditions of employment between an employer and employee.