Rob and Sharon form Swallow Corporation with the following investments.
Each receives 50% of Swallow's stock.In addition,Sharon receives cash of $40,000.One result of these transfers is that Sharon has a:
A) Recognized loss of $60,000.
B) Recognized loss of $20,000.
C) Basis of $460,000 in the Swallow stock (assuming Swallow reduces its basis in the land to $440,000) .
D) Basis of $400,000 in the Swallow stock (assuming Swallow reduces its basis in the land to $440,000) .
E) None of the above.
Correct Answer:
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