April transferred 100 percent of her stock in June Company to March Corporation in a taxable merger. In exchange she received stock in March with a fair market value of $400,000 plus $1,200,000 in cash. April's tax basis in the June stock was $2,000,000. What amount of loss does April recognize in the exchange and what is her basis in the March stock she receives?
What will be an ideal response?
$400,000 capital loss. Her basis in the March stock is $400,000, the stock's fair market value. The transaction is taxable because boot exceeds 60 percent of the consideration.
Loss is recognized because the exchange is not tax-deferred. The stock basis is fair market value because the transaction is taxable.
You might also like to view...
Enduring characteristics within a person or in his or her relationship with others are referred to as a(n) ________.
A. ideal self B. key trait C. self-concept D. core value E. persona
Karl owns a Halloween costume store and needs to hire some seasonal workers for September and October. Which of the following would best meet his needs?
a. executive recruiters b. temporary agencies c. public agencies d. private employment agencies
After asking a prospect a question, a salesperson should remain silent and wait for an answer.
Answer the following statement true (T) or false (F)
A July sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit. Management forecasts 2% growth in sales each month. Total July sales are anticipated to be:
A. $67,500. B. $64,260. C. $61,250. D. $63,000. E. $60,000.