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Jacob and Ashley Form Junco Corporation with the Following Investments

Question 114

Multiple Choice

Jacob and Ashley form Junco Corporation with the following investments: ​
Jacob and Ashley form Junco Corporation with the following investments: ​ Jacob and Ashley each receive one-half of the Junco stock. In addition, Ashley receives cash of $100,000. One of the results of these transfers is: A) Jacob has a recognized loss of $100,000. B) Ashley has a recognized gain of $300,000. C) Junco Corporation has a basis in the land of $400,000. D) Ashley's basis in the Junco Corporation stock is $500,000. E) None of the above. Jacob and Ashley each receive one-half of the Junco stock. In addition, Ashley receives cash of $100,000. One of the results of these transfers is:


A) Jacob has a recognized loss of $100,000.
B) Ashley has a recognized gain of $300,000.
C) Junco Corporation has a basis in the land of $400,000.
D) Ashley's basis in the Junco Corporation stock is $500,000.
E) None of the above.

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