Julian transferred 100 percent of his stock in Lemon Company to Apricot Corporation in a Type B stock-for stock exchange. In exchange, he received stock in Apricot with a fair market value of $380,000. Julian's tax basis in the Lemon stock was $760,000. What amount of loss does Julian recognize in the exchange and what is his basis in the Apricot stock he receives? Multiple Choice $380,000 loss recognized and a basis in Apricot stock of $380,000. No loss recognized and a basis in Apricot stock of $760,000. $380,000 loss recognized and a basis in Apricot stock of $760,000. No loss recognized and a basis in Apricot stock of $380,00.
Julian transferred 100 percent of his stock in Lemon Company to Apricot Corporation in a Type B stock-for stock exchange. In exchange, he received stock in Apricot with a fair market value of $380,000. Julian's tax basis in the Lemon stock was $760,000. What amount of loss does Julian recognize in the exchange and what is his basis in the Apricot stock he receives? Multiple Choice $380,000 loss recognized and a basis in Apricot stock of $380,000. No loss recognized and a basis in Apricot stock of $760,000. $380,000 loss recognized and a basis in Apricot stock of $760,000. No loss recognized and a basis in Apricot stock of $380,00.
Chapter18: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 43P
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Transcribed Image Text:Julian transferred 100 percent of his stock in Lemon Company to Apricot Corporation in a Type B stock-for stock exchange. In exchange, he received
stock in Apricot with a fair market value of $380,000. Julian's tax basis in the Lemon stock was $760,000. What amount of loss does Julian recognize in
the exchange and what is his basis in the Apricot stock he receives?
Multiple Choice
$380,000 loss recognized and a basis in Apricot stock of $380,000.
No loss recognized and a basis in Apricot stock of $760,000.
$380,000 loss recognized and a basis in Apricot stock of $760,000.
No loss recognized and a basis in Apricot stock of $380,00.
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