Hazel Transferred the Following Assets to Starling Corporation

question 117

Multiple Choice

Hazel transferred the following assets to Starling Corporation.
​

In exchange, Hazel received 50% of Starling Corporation's only class of stock outstanding. The stock has no established value. However, all parties believe that the value of the stock Hazel received is the equivalent of the value of the assets she transferred. The only other shareholder, Rick, formed Starling Corporation five years ago.

• A)Hazel has no gain or loss on the transfer.
• B)Starling Corporation has a basis of $48,000 in the machinery and $108,000 in the land.
• C)Starling Corporation has a basis of $36,000 in the machinery and $144,000 in the land.
• D)Hazel has a basis of $276,000 in the stock of Starling Corporation.
• E)None of the above.

---

Definitions:

Marital Status

A legally defined condition relating to an individual's marriage situation, such as single, married, divorced, or widowed.

Fair Debt Collection Practices Act

A U.S. statute established to eliminate abusive debt collection practices by debt collectors, and to promote fair debt collection.

Misrepresenting

Providing false or misleading information or statements, often with the intent to deceive.

Obsolete

Obsolete describes an item, technology, or procedure that is out of date or no longer produced or used, often because it has been replaced by newer versions or alternatives.