Courtney is interested in purchasing The Matrix Company.Matrix's assets are:

I.If Courtney buys the stock of The Matrix for $225,000,the total basis in the assets will be $200,000.
II.If Courtney pays Matrix $240,000 for the Matrix assets,Courtney's total basis in all of the assets of the business will be $123,400.

Question

Courtney is interested in purchasing The Matrix Company.Matrix's assets are:
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I.If Courtney buys the stock of The Matrix for $225,000,the total basis in the assets will be $200,000.
II.If Courtney pays Matrix $240,000 for the Matrix assets,Courtney's total basis in all of the assets of the business will be $123,400.
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Quizplus · Accepted Answer

Neither statement is correct. The two statements provide contradictory information about the basis in the assets. Statement I implies a total basis of $200,000, while statement II implies a total basis of $123,400. It is not possible for both of these to be correct.

Courtney Is Interested in Purchasing the Matrix Company