Homework answers / question archive / Celeste transferred 100 percent of her stock in Supply Chain Company to Marketing Corporation in a Type A merger

Celeste transferred 100 percent of her stock in Supply Chain Company to Marketing Corporation in a Type A merger

Accounting

Share With

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 $537,500 plus $537,500 in cash. Celeste's tax basis in the Supply Chain stock was $1,335,000. What amount of loss does Celeste recognize in the exchange and what is her basis in the Marketing stock she receives?

Multiple Choice

• $260,000 loss recognized and a basis in Marketing stock of $1,335,000.

• No loss recognized and a basis in Marketing stock of $1,335,000.

• $260,000 loss recognized and a basis in Marketing stock of $797,500.

• No loss recognized and a basis in Marketing stock of $797,500.