Casey Transfers Property with a Tax Basis of $2,000 and a Fair

question 53

Multiple Choice

Casey transfers property with a tax basis of $2,000 and a fair market value of $5,000 to a corporation in exchange for stock with a fair market value of $4,000 and $400 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $600 on the property transferred. Casey also incurred selling expenses of $300. What is the amount realized by Casey in the exchange?

• A)$5,000
• B)$4,700
• C)$4,600
• D)$4,200

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Definitions:

Resource Cost

The total cost of all inputs used in the production of goods or services, including raw materials, labor, and capital. It reflects the expenditure needed to create and bring a product or service to the market.

Trade

The exchange of goods and services between individuals or entities, typically referring to international trade involving the movement of products across borders.

Specialization and Trade

An economic concept where individuals or entities focus on the production of specific goods or services to trade for other goods or services, enhancing efficiency and productivity.

Efficient Scale

The level of production at which a firm achieves the lowest long-run average cost, with all inputs utilized most effectively.