Yenhung,who Is Single,forms a Corporation Using a Tax-Free Asset Transfer,which $$\begin{array} { |l | l| } \hline \text { Ordinary loss } & \text { Capital loss } \\\hline \$ 0 & \$ 20,000\\\hline\end{array}$$

Multiple Choice

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

A) $$\begin{array} { |l | l| } \hline \text { Ordinary loss } & \text { Capital loss } \\\hline \$ 0 & \$ 20,000\\\hline\end{array}$$
B) $$\begin{array} {| l | l |} \hline \text { Ordinary loss } & \text { Capital loss } \\\hline \$ 10,000 & \$ 10,000 \\\hline\end{array}$$
C) $$\begin{array} {| l | l |} \hline \text { Ordinary loss } & \text { Capital loss } \\\hline \$ 20,000 & \$ 0 \\\hline\end{array}$$
D) $$\begin{array} {| l | l |} \hline \text { Ordinary loss } & \text { Capital loss } \\\hline \$ 10,000 & \$ 0 \\\hline\end{array}$$