Celeste transferred 100 percent of her stock in Supply Chain Company to Marketing Corporation in a Type A merger. In exchange, she received stock in Marketing with a fair market value of $685,000 plus $685,000 in cash. Celeste's tax basis in the Supply Chain stock was $1,555,000. What amount of loss does Celeste recognize in the exchange and what is her basis in the Marketing stock she receives?

• a)$185,000 loss recognized and a basis in Marketing stock of $1,555,000.
• b)$185,000 loss recognized and a basis in Marketing stock of $870,000.
• c)No loss recognized and a basis in Marketing stock of $1,555,000.
• d)No loss recognized and a basis in Marketing stock of $870,000.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The correct answer is a 185000 loss rec... View the full answer