Rob, Bill, and Steve Form Big Company

question 54

Multiple Choice

Rob, Bill, and Steve form Big Company. Rob performs $45,000 of services for his shares of the company. Bill transferred property with a basis of $5,000 for $75,000 of stock. Steve contributes cash of $100,000 for his shares. Which of the three must recognize income in the year of the formation?

• A)Rob
• B)Rob, Bill
• C)Bill
• D)Steve, Bill
• E)Steve, Rob

---

Definitions:

Validation Dialog Box

A pop-up window that appears during form submission to confirm the accuracy of the information entered by the user.

Yes/No Data Type

A binary data type often used in databases and software programming to represent a truth value, typically storing values equivalent to true/false or yes/no.

Default Value

A value automatically assigned to a database field, variable, or parameter if no value is provided by the user.

Subdatasheet

A feature in database applications that allows for displaying a datasheet within another datasheet, enabling a hierarchical view of related data.