Multiple Choice
Mr. Jamail transferred business personality (FMV $187,000; adjusted tax basis $29,900) to J&K Inc. in exchange for J&K common stock. Which of the following statements is true?
A) If Mr. Jamail owns 14% of J&K's outstanding stock immediately after the exchange, he must recognize a $157,100 gain.
B) If Mr. Jamail owns 74% of J&K's outstanding stock immediately after the exchange, he must recognize a $157,100 gain.
C) If Mr. Jamail owns 81% of J&K's outstanding stock immediately after the exchange, he must recognize a $157,100 gain.
D) Statements a. and b. are true.
Correct Answer:
Verified
Correct Answer:
Verified
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