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Gabriella and Juanita form Luster Corporation. Gabriella transfers cash of $50,000 for 50 shares of stock, while Juanita transfers information concerning a proprietary process (basis of zero and fair market value of $50,000) for 50 shares of stock
a. Because Juanita is required to recognize gain on the transfer, Gabriella also must recognize gain.
b. Juanita must recognize gain of $50,000.
c. Neither Gabriella nor Juanita will recognize gain on the transfer.
d. The transfers to Luster are fully taxable to both Gabriella and Juanita.
e. None of these choices are correct.
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Gabriella and Juanita form Luster Corporation. Gabriella transfers cash of $50,000 for 50 shares of...
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