No further inclusion of income is required as the

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Unformatted text preview: ck as follows: Adjusted basis 5,000 60,000 Beck Carr Fair market value 20,000 70,000 Percentage of Flexo stock acquired 20% 70% What amount of gain did Carr recognize from this transaction? a. b. c. d. $40,000 $15,000 $10,000 $0 CPA-02134 Explanation Choice "d" is correct. Carr has no taxable income because he transferred property to Flexo in a transaction that qualifies as nontaxable. Choices "a", "b", and "c" are incorrect. Beck and Carr have no taxable income because they transferred property to Flexo. However, Adams' contribution of services is not "property" for this purpose, so the receipt of stock is taxable. CPA-02136 Type1 M/C A-D Corr Ans: C PM#64 R 3-01 47. CPA-02136 PII Nov 93 #41 Page 6 In 1992, Brun Corp. properly accrued $10,000 for an income item on the basis of a reasonable estimate. In 1993, Brun determined that the exact amount was $12,000. Which of the following statements is correct? a. b. c. d. Brun is required to file an amended...
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