In 2019, Aaron transferred property worth $75,000 and services worth $25,000 to the BJ Corporation. In exchange,
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Question:
In 2019, Aaron transferred property worth $75,000 and services worth $25,000 to the BJ Corporation. In exchange, he received stock in BJ valued at $100,000. Immediately after the exchange, Aaron owned 80% of the only class of outstanding stock. Which of the following is true with regard to Aaron’s treatment of this transaction?
A. Short-term capital gain of $100,000.
B. Short-term capital gain of $25,000.
C. Ordinary income of $25,000.
D. No income until the stock is sold
Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
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