Kevin and Nicole Form Indigo Corporation with the Following Transfers

question 84

Multiple Choice

Kevin and Nicole form Indigo Corporation with the following transfers: inventory from Kevin (basis of $360,000 and fair market value of $400,000) and improved real estate from Nicole (basis of $320,000 and fair market value of $375,000) .Nicole,an accountant,agrees to contribute her services (worth $25,000) in organizing Indigo.The corporation's stock is distributed equally to Kevin and Nicole.As a result of these transfers:

• A)Indigo can deduct $25,000 as a business expense.
• B)Nicole has a recognized gain of $55,000 on the transfer of the real estate.
• C)Indigo has a basis of $360,000 in the inventory.
• D)Indigo has a basis of $375,000 in the real estate.
• E)None of the above.

Understand the concept and calculation of price elasticity of demand.

Recognize the determinants of price elasticity, including the availability of substitutes and the necessity of the product.

Grasp the difference in demand elasticity over short-term vs. long-term periods.

Identify factors influencing the elasticity of demand, including the categorization of goods as necessities or luxuries.

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Definitions:

Etiquette

The set of conventional rules of personal behavior in polite society, usually in the form of a code of conduct.

Negative Sanctions

Punishments or disapprovals aimed at discouraging undesired behaviors within a society or group.

Dominant Culture

The prevailing cultural norms, values, and practices that are most influential within a society or social group.

Culture War

The term culture war refers to the conflict between groups with different cultural values, beliefs, and practices, often highlighting societal divisions on issues like morality, religion, and lifestyle.