Yenhung,who is single,forms a corporation using a tax-free asset transfer,which qualifies under Sec.351.She contributes property having an adjusted basis of $50,000 and an FMV of $40,000.The stock received from the corporation is Sec.1244 stock.When Yenhung sells the stock for $30,000,her loss is

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B)The loss on formation of the corporation ($10,000)is postponed until the stock is sold and retains its character as capital.$10,000 of the loss ($30,000 sales proceeds - $40,000 Sec.1244 basis)qualifies as an ordinary loss on the sale of Sec.1244 stock.

Yenhung,who Is Single,forms a Corporation Using a Tax-Free Asset Transfer,which