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 $500,000 plus $500,000 in cash. Celeste's tax basis in the Supply Chain stock was $1,200,000. What amount of loss does Celeste recognize in the exchange and what is her basis in the Marketing stock she receives? Multiple Choice $200.000 loss recognized and a basis in Marketing stock of $1,200.000 $200.000 loss recognized and a basis in Marketing stock of $700.000 No loss recognized and a basis in Marketing stock of $1,200,000 No loss recognized and a besis in Marketing stock of $700,000
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 $500,000 plus $500,000 in cash. Celeste's tax basis in the Supply Chain stock was $1,200,000. What amount of loss does Celeste recognize in the exchange and what is her basis in the Marketing stock she receives? Multiple Choice $200.000 loss recognized and a basis in Marketing stock of $1,200.000 $200.000 loss recognized and a basis in Marketing stock of $700.000 No loss recognized and a basis in Marketing stock of $1,200,000 No loss recognized and a besis in Marketing stock of $700,000
Chapter18: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 43P
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Transcribed Image Text: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 $500,000 plus $500,000 in cash. Celeste's tax basis in the Supply Chain stock was $1,200,000. What amount of loss does Celeste recognize in the exchange and
what is her basis in the Marketing stock she receives?
Multiple Choice
$200,000 loss recognized and a basis in Marketing stock of $1,200,000
$200.000 loss recognized and a basis in Marketing stock of $700.000
No loss recognized and a basis in Marketing stock of $1,200,000
No loss recognized and a basis in Marketing stock of $700.000
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