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Henry Transfers Property with an Adjusted Basis of $90,000 and an FMV

Question 35

Multiple Choice

Henry transfers property with an adjusted basis of $90,000 and an FMV of $100,000 to a newly-formed corporation in a Sec. 351 exchange. Henry receives stock with an FMV of $80,000 and a short-term note with a $20,000 FMV. Henry's recognized gain is


A) $0.
B) $5,000.
C) $10,000.
D) $20,000.

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