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Mandarini Mandarini
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7 years ago
Grand Corporation transfers 40% of its assets having an adjusted basis of $600,000 and an FMV of $800,000 to New Corporation in exchange for 75% of its single class of stock. Grand Corporation is owned equally by Annie and Betsy who are unrelated. Annie's basis for her Grand stock is $300,000 and Betsy's basis is $400,000. Annie exchanges all of her Grand stock for all of the New stock received in the exchange. Which of the following statements is correct concerning these transactions?
A) Grand Corporation does not recognize a gain on the asset transfer to New Corporation or the stock distribution to Annie.
B) Annie recognizes a $500,000 capital gain on the exchange of the Grand stock for the New stock.
C) Annie's basis in the New stock is $300,000.
D) Grand's basis for the New assets is $600,000.
Textbook 
Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts

Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts


Edition: 27th
Authors:
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genflynngenflynn
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7 years ago
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We have the most crude accounting tools. It's tragic because our accounts and our national arithmetic doesn't tell us the things that we need to know.

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Mandarini Author
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7 years ago
Wow you guys are great!!!!!!!!!!!!!!

always correct
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4 years ago
you guys are great!
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