Question Content AreaMars Corporation merges into Jupiter Corporation by exchanging all of its assets for 300,000 shares of Jupiter stock valued at $2 per share and $100,000 cash. Wanda, the sole shareholder of Mars, surrenders her Mars stock (basis $900,000) and receives all of the Jupiter stock transferred to Mars plus the $100,000. How does Wanda treat this transaction on her Federal income tax return? a.Wanda recognizes a $100,000 gain. Her Jupiter stock basis is $900,000. b.Wanda recognizes a loss of $0. Her Juniper stock basis is $800,000. c.Wanda recognizes a $100,000 gain. Her Jupiter stock basis is $700,000. d.Wanda recognizes a loss of $100,000. Her Jupiter stock basis is $800,000.
Ma1.
Question Content AreaMars Corporation merges into Jupiter Corporation by exchanging all of its assets for 300,000 shares of Jupiter stock valued at $2 per share and $100,000 cash. Wanda, the sole shareholder of Mars, surrenders her Mars stock (basis $900,000) and receives all of the Jupiter stock transferred to Mars plus the $100,000. How does Wanda treat this transaction on her Federal income tax return?
a.Wanda recognizes a $100,000 gain. Her Jupiter stock basis is $900,000.
b.Wanda recognizes a loss of $0. Her Juniper stock basis is $800,000.
c.Wanda recognizes a $100,000 gain. Her Jupiter stock basis is $700,000.
d.Wanda recognizes a loss of $100,000. Her Jupiter stock basis is $800,000.
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