Inez Transfers Property with a Tax Basis of $200 and a Fair

question 104

Multiple Choice

Inez transfers property with a tax basis of $200 and a fair market value of $300 to a corporation in exchange for stock with a fair market value of $250 in a transaction that qualifies for deferral under section 351.The corporation assumed a liability of $50 on the property transferred.What is the corporation's tax basis in the property received in the exchange?

• A)$150.
• B)$200.
• C)$250.
• D)$300.

---

Definitions:

Hybrid Security

A hybrid security is a financial instrument combining elements of both debt and equity, offering benefits and risks of both types.

Common Stock

Represents ownership shares in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Dividend Per Share

The total dividends declared by a company for each outstanding share of common stock.

Expected Return

The weighted average of all possible returns for a given investment, factoring in the probabilities of each outcome, used as a tool for evaluating investments.