A 604 Corporation Exam #2 1. Sandra Sherman incorporates her apartment building. It has a basis of $50,000, a value of $150,000, is subject to a...

A 604 Corporation Exam #21. Sandra Sherman incorporates her apartment building. It has a basis of $50,000, a value of $150,000, is subject to a mortgage of $70,000 and has a depreciation recapture potential of $12,000. If Sandra receives stock worth $80,000, she will recognize:a. No gain.b. $30,000 of gain, $12,000 of which is ordinary.c. $12,000 of ordinary income.d. $20,000 of gain, $12,000 of which is ordinary.2. Evan Erman transferred inventory to a corporation in a Code Sec. 351 transaction. His basis in the inventory was $10,000 and its value was $8,000. If he received $2,000 in cash and 100 shares of stock, the resulting bases are:a. Evan’s stock: $8,000; Corporation’s inventory: $10,000b. Evan’s stock: $10,000; Corporation’s inventory: $10,000c. Evan’s stock: $10,000; Corporation’s inventory: $8,000d. Evan’s stock: $8,000; Corporation’s inventory: $12,0003. One year Potter, Inc. had gross income from sales of $210,000, business expenses of $230,000, and dividend income from U.S. corporations of $150,000. Potter’s 80 percent dividends-received deduction was:a. $104,000b. $120,000c. $0d. $150,0004. Prior to a charitable gift to the Plato University of land with a basis of $6,000 and a value of $13,000, All-Set, Inc. had taxable income of $50,000. If the dividends-received deduction was $80,000, the charitable contribution deduction is:a. $5,000b. $6,000c. $2,925d. $5,8005. Exclusive of capital transactions, Pixie Corp. had $100,000 of taxable income. Its capital gains and losses were:Short-term gain $10,000Long-term gain 12,000Short-term loss (20,000)Long-term loss 5,000Pixie’s taxable income for the year was:a. $97