Question

Celeste transferred 100 percent of her stock in Supply Chain Company to Marketing Corporation in a Type A merger. In exchange, she received stock in Marketing with a fair market value of $532,500 plus $532.500 in cash. Celeste's tax basis in the Supply Chain stock was $1.455,000. What amount of loss does Celeste recognize in the exchange and what is her basis in the Marketing stock she receives? Multiple Choice a $390,000 loss recognized and a basis In Marketing stock of $1,455,000. No loss recognized and a basis in Marketing stock of $1.455.000 O $390,000 loss recognized and a basis in Marketing stock of $922,500. No loss recognized and a basis in Marketing stock of $922.500.

Answer 1

solution Given data, marketing with a rai'r market value of $532,500 + 5321500 in cash $ 1,455,000 in the exchange there is no loss : 532,500 stock was recognize if she sell stock at 922500 stock basis = liuss, 000-532,500 Pf she shell stock loss will be (922500 -532,500) 390000 is correct answer. option A $ 399,000 loss recognized and abas's in marketing stock $1455,000 Here no amount of loss will be recognized by the state in the exchange as in the case Ipqui dahen of the company is tax deffered no amount of louds will be recognized SO

7 further packard's basis in the is equal to the basis. in the tand state company has, here in present case stale company has basů of $527,500.00 basis in the land for packad's is the $5271500 Optionc No loss recognized by state and a basis land of $8271500 to packard . in