Rachel owns 100% of the stock of Cardinal Corporation. In the current year Rachel transfers an installment obligation, tax basis of $180,000 and fair market value of $350,000, for additional stock in Cardinal worth $350,000. Rachel has a taxable gain of $180,000. Rachel has a taxable gain of $170,000. Rachel recognizes no taxable gain on the transfer. Rachel has a basis of $350,000 in the additional stock she received in Cardinal Corporation. None of the above.
Rachel owns 100% of the stock of Cardinal Corporation. In the current year Rachel transfers an installment obligation, tax basis of $180,000 and fair market value of $350,000, for additional stock in Cardinal worth $350,000. Rachel has a taxable gain of $180,000. Rachel has a taxable gain of $170,000. Rachel recognizes no taxable gain on the transfer. Rachel has a basis of $350,000 in the additional stock she received in Cardinal Corporation. None of the above.
Chapter3: Income Sources
Section: Chapter Questions
Problem 73P
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Transcribed Image Text:Rachel owns 100% of the stock of Cardinal Corporation. In the current year Rachel transfers an installment obligation, tax basis of $180,000 and fair
market value of $350,000, for additional stock in Cardinal worth $350,000.
Rachel has a taxable gain of $180,000.
Rachel has a taxable gain of $170,000.
Rachel recognizes no taxable gain on the transfer.
Rachel has a basis of $350,000 in the additional stock she received in Cardinal Corporation.
None of the above.
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ISBN:
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Author:
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Publisher:
CENGAGE LEARNING - CONSIGNMENT