Allen Transfers Marketable Securities with an Adjusted Basis of $120,000

question 81

True/False

Allen transfers marketable securities with an adjusted basis of $120,000, fair market value of $300,000, for 85% of the stock of Heron Corporation. In addition, he receives cash of $40,000. Allen recognizes a capital gain of $40,000 on the transfer.

---

Definitions:

Variable Torque

Refers to motors or drives designed to manage varying load torque demands in applications like fans or pumps.

Mechanical Loads

Forces, torques, or loads applied to a mechanical system, influencing its performance and structural integrity.

Torque Loading

The process or state of applying a rotational force to a shaft or system, affecting its speed and performance.